Celebrating its 61st anniversary of foundation and marking the first year of integration, Korea Development Bank is set out to reinforce its role as policy finance implementer.
The state-run bank launched the New Start KDB Prime Rate Loan to support small and medium-sized companies and thus to back up the government’s creative economy goals, according to KDB officials Tuesday.
The KDB headquarters in Yeouido, central Seoul. (KDB)
The special loan scheme, operating on a 2 trillion won budget ($1.8 billion), will offer an interest rate benefit to SMEs that seek loans to improve their management or to expand facilities.
The maximum interest rate cut is 1 percent for the Korean won, and 0.4 percent for other currencies such as the U.S. dollar, yen and euro.
“SMEs are the key players in the nation’s economic growth and job creation,” said a KDB official.
“As the largest state-run policy financing institution, we will continuously work to expand our exclusive services for SMEs.”
A special fund to back the overseas expansion of SMEs was also introduced, in order to minimize the investment risks for export companies and to encourage them to pioneer new sources of revenue in the global market.
The special fund will operate on a budget of 500 billion won, among which 300 billion has been allocated exclusively to SMEs.
Export companies may enjoy an interest rate cut of up to 0.5 percent when taking the loan in the Korean won.
“The increasing volatility of the global financial market has made it difficult for Korean companies to make profitable investments,” the official said.
“The purpose of the fund is to support SMEs to (help them) overcome current hardships and to make inroads into the market.”
To execute these projects, the KDB is planning to execute 35 trillion won, or 55.4 percent, of its yearly budget within the first half of the year, hoping that the financial benefits may revitalize the nation’s economy.
In January this year, the KDB kicked off as a new integrated policy financing body after merging with the Korea Finance Corporation.
By Bae Hyun-jung (tellme@heraldcorp.com)