Financial regulator vows more support for virus-stricken SMEs

Financial Services Commission (FSC) Chairman Eun Sung-soo, left, speaks during a meeting with key leaders of the country's small- and medium-sized business sector at the headquarters of the Korea Federation of SMEs (KBIZ) on Yeouido, Monday. / Yonhap

By Anna J. Park

The Financial Services Commission (FSC) has vowed to maintain state support for small- and medium-sized enterprises (SMEs) reeling from rising borrowing costs caused by credit rating downgrades amid the fallout of the COVID-19 pandemic.

During a meeting with key SME business leaders on Monday morning, FSC Chairman Eun Sung-soo vowed to protect the country's SME sector through various financial policies favorable to the industry.

“The FSC is well aware of the SME sector's concerns over credit rating downgrades due to downturns in last year's revenues and their worries that this would worsen loan conditions amid rising interest rates. The government has been holding close discussions with the financial industry to alleviate such worries felt by SMEs,” Eun said during the meeting.

The head of the watchdog agency also stressed that financial institutions will take into full account the potential of SMEs to see sales recover when it comes to credit rating assessments, especially for those experiencing temporary difficulties due to the pandemic situation.

“Regarding companies whose credit ratings unavoidably fell, the FSC will try to minimize impact, such as loan limits or loan interest rates,” the FSC chief added, reiterating that such policy guidelines will be reflected in the financial companies' loan programs.

Eun expressed gratitude towards SMEs for their roles in buttressing the economy amid the COVID-19 pandemic. He also vowed to listen to their opinions and voices through a government-led financial support center for SMEs, which has been launched recently to strengthen support for the industry. The FSC chief suggested other policy guidelines, including extensions of loan maturity and amortized installments for a longer period.