South Korea’s financial institutions are announcing measures to assist local businesses -- mostly small and medium-sized enterprises, which are likely to bear the brunt of the recent coronavirus outbreak.
Commercial banks here are at the forefront of efforts to support small businesses, with many expanding their loan programs and offering discounted interest rates for SMEs.
Announcing its support package on Sunday, KB Kookmin said it would offer loans of up to 500 million won ($417,000) for companies in need of emergency funding, including SMEs in the tourism and services sectors, which are expected to be hit hardest. Interest on those loans will be cut by as much as 1 percentage point.
The bank will extend maturity dates for corporate clients that need more time to repay their debt. It will cooperate with local credit guarantee institutions, including the Seoul Credit Guarantee Foundation, to extend loans of around 460 billion won to such firms.
Its card-issuing affiliate, KB Kookmin Card, has also unveiled measures including the option to delay payment of credit card debt.
Shinhan Financial Group announced that all 16 of its business units will offer support as part of the holding firm’s “comprehensive measures.”
Its flagship banking unit, Shinhan Bank, will offer loans worth some 100 billion won to SMEs. Each firm will be able to borrow up to 500 million won through the program.
For SMEs with annual sales of less than 500 billion won, Shinhan Card plans to offer interest-free installment plans for two to three months.
Woori Bank will extend loans worth 100 billion won to SMEs. Of the total, 50 billion will be allocated for fresh loans while the remaining amount will be for loan extensions. Discounted interest rates of up to 1.3 percentage points will be offered.
Hana Bank is to offer loans worth a total of 300 billion won, with each firm being allowed to borrow up to 500 million won. The lender will extend maturity dates for up to one year without principal payments.
The outbreak of the deadly new coronavirus is widely expected to leave a dent on the nation’s tourism and services industry.
As of early Monday, Korea had reported a total of 15 confirmed cases of coronavirus infection. The death toll in mainland China was 361, according to Chinese health authorities.
By Jung Min-kyung (firstname.lastname@example.org)