Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
5 major banks support promising SMEs facing financial difficulties
CEOs and other represenatives from small and medium-sized enterprises (SMEs) attend a nationwide meeting for SME entrepreneurs in Seoul, Friday. Yonhap
By Yi Whan-woo
Five major commercial banks in Korea are rolling out measures to support technologically promising small- and medium-sized enterprises (SMEs) that are financially distressed amid the deepening economic downturn, according to industry officials, Wednesday.
The measures taken by KB, Shinhan, Hana, Woori and NH NongHyup come in response to data showing that a total of 2,339 SMEs nationwide in 2024 — up 24 percent from a year earlier — were at risk of not being able to service their debts and will eventually go bankrupt without timely support.
The country’s largest lender, KB Kookmin Bank, plans to use some of its idle branches' consultation spaces for SMEs and self-employed individuals.
The consulting services are scheduled to begin in the second half of the year, in collaboration with the Small Enterprise and Market Service, a government-affiliated SME support organization.
Shinhan Bank is in discussions with financial authorities to nearly double the number of its corporate support centers, which they established last year.
Aimed at addressing management challenges faced by SMEs, 16 centers are currently in operation, including 12 located within existing bank branches.
These centers offer not only debt restructuring measures but also a range of services for businesses, such as tax, accounting, legal affairs and marketing.
Hana Bank and Woori Bank are also working to ease loan conditions for SMEs struggling to make repayments under existing programs.
Additionally, Woori Bank is planning a large-scale funding initiative, comparable to the support program it offered to SMEs during the COVID-19 pandemic.
NH NongHyup Bank plans to raise 2.6 trillion won ($1.88 billion) this year in collaboration with credit guarantee institutions such as the Korea Credit Guarantee Fund and the Korea Technology Finance Corporation.