South Korea’s State-Run Banks To Give Yearly Lending And Investment Budget Worth 12.5 Billion USD To Start-Ups And SMEs
South Korea announced two state-run banks will give yearly lending and investment budget to start-ups and small- and medium-sized enterprises (SMEs) starting 2018. Live Mint reported Sunday that these institutiosn will shift around $12.5 billion from larger firms.
According to reports, the measure is compelled "by some huge corporate losses and a darkening economic outlook."
Korea Development Bank (KDB) and the Industrial Bank of Korea will also transfer 9.9 trillion won annually in lending and investment starting 2018.
The two banks will reportedly move the money from recognized sectors, including shipbuilding and carmakers, to growth sectors such as wearable tech, according to Financial Services Commission (FSC).
Reuters forecasted Sunday that the South Korean government has recently pushed to talk about accumulating corporate debt in the country's economy, which is partly "due to huge losses in companies state banks have controlled or funded for years."
These companies include the world's largest shipyard Daewoo Shipbuilding & Marine Engineering (DSME).
KDB and Korea Export-Import Bank of Korea announced last month that they will inject 4.2 trillion won to assist the financially-troubled Daewoo. The two banks will reportedly provide 2.6 trillion won and 1.6 trillion won respectively.
"After three months of due diligence on the shipbuilder, creditors have decided to offer the financial aid to help put it back on track and then recoup our loans extended to it," KDB Director Joung Young Suk says.
Further reports have revealed that other creditors have also provided 2.9 trillion won to DSME. Aside from that, KDB says it is planning to sign a memorandum of understanding with the company this month on Daewoo's self-rescue plans, as reported by Korea Times on Oct. 29.
On the other hand, KDB will advertise 91 of its 118 non-fictional units in the next three years while it undergoes reforming. In addition, the Industrial Bank of Korea will increase its investment to start-ups to 480 billion won by 2018.
