BOK extends loan support for small business owners and SMEs affected by Corona by 6 months

Enter 2021.03.25 11:15

The Bank of Korea announced at the Financial Monetary Commission on the 25th that it has decided to extend the loan deadline (based on bank loan handling) for small businesses and small and medium-sized businesses affected by the novel coronavirus infection (Corona 19) by six months until the end of September this year.

This is a temporary measure considering the fact that small businesses and SMEs continue to have difficulties in financing, focusing on the face-to-face service industry as the social distancing increases.

Financial brokerage support loans are a system in which the BOK supplies funds to financial institutions at an ultra-low interest rate of 0.25% per year to induce an increase in loans for SMEs and self-employed people. The limit of support for small business owners and companies is 3 trillion won (300 million won per company) and 13 trillion won (500 million won per company), respectively.

Since March of last year, the BOK has provided funding to small businesses and small and medium-sized enterprises affected by Corona 19 through financial intermediary loans.

Last year, three times (March, May, and October), the loan limit was increased to a total of 16 trillion won. As of this month, the amount of support is 13,6 trillion won.

From March last year to January this year, 111,000 companies used the funds supported by the Bank of Korea. The average loan amount per company is 230 million won.

With the financial support of the BOK, the average loan interest rate (new handling amount in January, based on four commercial banks) for companies affected by Corona 19 decreased by 26-126bp (1bp = 0.01% point).