BOK to extend support fund for smaller firms

BOK to extend support fund for smaller firms

Korea’s central bank said Thursday it will expand low-interest loans to small and medium enterprises in a bid to help them overcome an economic funk and boost the economy’s recovery.

A total of 9 trillion won ($7.28 billion) will be raised for the so-called “bank intermediate lending support facility,” with 4 trillion won to be newly earmarked and the rest to come from part of the existing 20 trillion won fund reserved for the same purpose, according to the Bank of Korea (BOK).

It will be the second raise in its scale, following the one in March last year when the BOK raised the ceiling for the support facility by 5 trillion won to 20 trillion won while cutting the borrowing costs by 0.25 percentage points to as low as 0.5 percent.

Of the increased amount, some 3 trillion won will be used to support their trade finances, while 2.9 trillion won will be earmarked to boost their capital investment. The rest aims at helping startups, according to the BOK.

“We will start managing the new fund starting next month, and the extended amount will be available for one year,” the central bank said in a release.

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