South Korea Launches $57 Billion Support Program for Businesses Amid Economic Challenges

South Korea is rolling out a substantial $57 billion financial support program aimed at bolstering companies that are ramping up investments in crucial sectors and aiding small businesses grappling with the repercussions of elevated interest rates. This strategic initiative encompasses $15 billion in low-interest policy loans from a state-controlled bank targeting vital industries such as semiconductors and batteries. Additionally, commercial banks are set to contribute $20 billion to support small and medium-sized enterprises (SMEs), as announced by the Financial Services Commission.

Chairman Kim Joo-hyun emphasized the need for banks to diversify their support beyond consumer financing, which has predominantly focused on mortgage loans. He highlighted the evolving trade dynamics with China, technological advancements in key industries, and the fragmentation of global supply chains as pressing challenges necessitating regulatory reform and robust financial support.

The program also caters to companies encountering liquidity issues due to the prevailing high interest rates by offering temporary interest rate reductions. This move underscores South Korea’s commitment to stabilizing its economy and ensuring the sustainability of its core industries and SMEs amidst global economic uncertainties.

This initiative comes as part of South Korea’s broader efforts to strengthen its economic foundation, including extending tax benefits for chip investments, thereby reinforcing its position in the global market and supporting the resilience of its business sector.