South Korea prepares $57 billion corporate financial support programme

FILE PHOTO: The skyline of central Seoul is seen during a foggy day in Seoul March 4, 2015.Picture taken on March 4, 2015. REUTERS/Kim Hong-Ji/File Photo

SEOUL (Reuters) – South Korea has prepared a financial support programme of 75.9 trillion won ($56.97 billion) for companies increasing investment in key sectors as well as small businesses struggling with the impact of high interest rates.

The programme includes 15 trillion won worth of cheap policy loans from a state-run bank for key industries, such as semiconductor and battery, while commercial banks will also provide 20 trillion won to support small and medium-sized businesses, the Financial Services Commission said in a statement on Thursday.

“Our banks need to start making efforts to expand support for companies, beyond consumer financing focused on mortgage loans,” said Chairman Kim Joo-hyun.

Evolving trade relations with China, technological advancement in major industries and fragmentation of global supply chains pose new challenges to companies, raising the need for regulatory reform and financial support, Kim said.

For companies facing liquidity trouble this year due to high interest rates, banks will offer a temporary cut in interest rates, the commission said.

($1 = 1,332.3700 won)

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