KODIT and NH NongHyup Bank to Provide KRW 383 Billion in Preferential Guarantees for SMEs and Regional Companies

Korea Credit Guarantee Fund (KODIT) and NH NongHyup Bank will supply a total of KRW 383 billion in preferential guarantees to support financing for outstanding small and medium-sized enterprises (SMEs) and regional specialized companies outside the Seoul metropolitan area.

On July 22, KODIT announced that it had each signed a "Financial Support for Expanding Productive Finance and Recovery of Growth" agreement and a "Financial Support for Expanding Regionally Specialized Productive Finance and Recovery of Growth" agreement with NH NongHyup Bank. These agreements are intended to enhance the competitiveness of outstanding SMEs and support the government's policy of balanced regional growth. The two organizations plan to expand the liquidity of companies and reduce their financial costs through these preferential guarantee agreements.

Under the agreement, NongHyup Bank will contribute a special fund of KRW 7.5 billion and a guarantee fee support fund of KRW 2.5 billion to KODIT. Using these funds, KODIT will supply a total of KRW 383 billion in guaranteed loans under the agreements. First, through the "Agreement for Expanding Productive Finance," KODIT will support KRW 220 billion in guarantees for outstanding SMEs, including companies leading new growth engine industries, promising startups, export- and overseas expansion-oriented companies, and companies creating jobs. Through the "Regional Specialization Agreement," it plans to provide KRW 163 billion in guarantee agreements to companies engaged in regional base industries, SMEs relocated to non-capital regions, and companies investing in local areas, all of which are based outside the Seoul metropolitan area.

For companies eligible for the preferential guarantee agreement funded by the special fund, KODIT will apply a 100% guarantee ratio for three years. The guarantee fee will be reduced by 0.2 percentage points for general targeted companies and by 0.3 percentage points for those eligible under the regional specialization agreement. Companies using the guarantee fee support agreement will receive an additional reduction of 0.5 percentage points in guarantee fees. For companies under the regional specialization agreement, an extra preferential benefit will be added, resulting in a total reduction of 0.6 percentage points, thereby further reducing the financial cost burden for non-capital region companies. A KODIT representative stated, "We hope this agreement will help secure future growth engines for outstanding SMEs and companies outside the Seoul metropolitan area," and added, "We will continue to actively support the sustainable growth of SMEs and balanced regional development going forward."

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