Korea SMEs and Startups Agency to inject W100b into firms hit by exchange rate swings, disasters

The Korea SMEs and Startups Agency will allocate 100 billion won ($73.6 million) in emergency business stabilization funds for small and medium-sized enterprises struggling with exchange rate volatility and heavy rainfall damage. The move follows an earlier expansion of the agency's emergency stabilization fund — originally set at 250 billion won this year — to 500 billion won through a supplementary budget.

The agency announced Tuesday it would provide 100 billion won in emergency business stabilization funds targeting small and medium-sized enterprises affected by exchange rate fluctuations and natural disasters.

The emergency business stabilization fund is a policy fund designed to help small and medium-sized enterprises return to normal operations after temporary financial difficulties or disaster damage. This year's overall SME policy fund was originally set at 4.43 trillion won, of which 250 billion won was earmarked for emergency business stabilization. After the government approved a supplementary budget in April, the emergency stabilization allocation expanded to 500 billion won.

Under the new support program, each eligible company may borrow up to 1 billion won. Loans carry a two-year grace period followed by three-year installment repayment. Firms hurt by exchange rate swings will be charged the policy fund benchmark interest rate plus 0.5 percentage points. Companies in areas designated as special disaster zones following recent heavy rainfall will receive a preferential fixed interest rate of 1.5 percent per year.

The government declared the entirety of Geoje in South Gyeongsang Province and the Sanyang-eup and Bongpyeong-dong areas of Tongyeong priority special disaster zones after torrential rain battered the region from Aug. 15 to 18. Geoje recorded 956.1 millimeters of rainfall during that period, while Tongyeong received 766.9 millimeters; Geoje also logged a peak hourly precipitation of 124.5 millimeters.

The agency will review eligibility and conduct on-site assessments before deciding whether to approve each application. Companies can apply through the agency's online policy fund system.

"The Korea SMEs and Startups Agency listens closely to voices from the field and provides policy fund support so that small and medium-sized enterprises facing crises can overcome their difficulties and get back on their feet," agency chief Kang Seok-jin said. "We will do our utmost to ensure this support serves as a lifeline for small and medium-sized venture companies struggling with exchange rate volatility or disaster damage."