The Ministry of Small and Medium Enterprises and Entrepreneurship of South Korea, headed by the minister, plans to launch a network loan program in 2024 for the mutual growth of SMEs.
This plan aims to overcome the financial challenges faced by small and medium-sized businesses after signing supply contracts, by offering short-term, low-interest production financing. Applications will be accepted starting April 2.
South Korean SMEs often face production delays, resulting in longer periods between ordering products and receiving payment. This makes it vital for them to secure financing for production, including the cost of raw materials. However, high interest rates and lending restrictions have made it difficult to obtain such financing, leading to an increase in demand for short-term financial support.
Meeting of South Korea with a delegation from Timor-Leste
The “Network Loan for Mutual Growth” program seeks to improve the supply chain by establishing a cooperative ecosystem between large companies and SMEs. It will offer financing of up to 80% of the order amount, based on intercompany purchase orders.
Eligible SMEs are those that have done business with the company placing the order in the last year. The program offers flexibility in loan terms and lower interest rates than commercial banks.
CHOI Won-young, Director General of Global Growth Policy, expressed hope that this program will facilitate quick and easy access to financing for the production needs of the country’s small and medium-sized enterprises, encouraging an improvement in supply chains. and locally beneficial partnerships.
Source: https://reporteasia.com/economia/industria/2024/04/05/corea-sur-fomenta-cooperacion-empresarial/
