With more and more news about the spread of the Wuhan coronavirus, consumers and businesses alike are becoming more wary about travelling to China and purchasing Chinese goods. As a result, the global economy is currently seeing a downturn.
SMEs in particular are heavily affected by this issue. In South Korea, financial institutions are making moves to assist local SMEs. The commercial banks are at the forefront of efforts to support said SMEs, with many expanding their loan programmes and offering discounted interest rates for SMEs.
KB Kookmin announced its support package recently, stating that it would offer loans up to 500 million won (US$417,000) for companies in need of emergency funding, especially SMEs in the tourism and service sectors which are expected to be hit hardest. Interest on these loans will be cut as much as one percentage point.
The bank will extend maturity dates for corporate clients that need more time to repay their debt. Its card-issuing affiliate, KB Kookmin Card, has also unveiled measures including the option to delay payment of credit card debt.
Other institutions such as Shinhan Financial Group announced that all 16 of its business units will offer support as part of the holding firm’s “comprehensive measures”.
Shinhan’s flagship banking unit, Shinhan Bank, will also be offering loans worth around 100 billion won to SMEs. Each firm will be able to borrow up to 500 million won through the programme. For SMEs with annual sales of less than 500 billion won, Shinhan Card plans to offer interest-free instalment plans for two to three months.
Many other banks are also taking similar measures to offer assistance to struggling SMEs in the tourism and services industry. As of 3 February, Korea had reported a total of 15 confirmed cases of coronavirus infection. It is likely that the financial institutions will continue to offer their assistance as long as consumers remain wary of the viral issue.