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The Export-Import Bank of Korea (www.koreaexim.go.kr, Chairman BANG, Moon-kyu, “Korea Eximbank”) announced March 25 that it would execute the Emergency Financial Support Program (EFSP), a KRW 20 trillion relief fund program for Korean companies suffering financial difficulties from the COVID-19.
The latest announcement deals with an additional KRW 16.3 trillion to the KRW 3.7 trillion aid package committed earlier last month.
A total of KRW 20 trillion fund will be used for extending the maturity of existing loans (KRW 11.3 trillion) and offering new loans and guarantees (KRW 8.7 trillion).
The specifics of the new loan and guarantee program are as follows:
Emergency Operating Loan: KRW 2 trillion loans to support Korean companies at risk of losing business foothold due to the COVID-19.
Export Performance-based Loan: KRW 2 trillion loans to support the COVID-19 stricken exporters and large business groups in industries leading innovative growth and material & equipment industries considering the rapidly aggravating trade environment.
This loan program will back the recovery of the companies with liquidity crisis due to the pandemic and provide active and preemptive financial support for industries leading the nation’s innovative growth and the material and parts industries that require continuous inflow of investments.
Operating Fund Expansion and Guarantees: In addition to extending the maturity of existing loans, additional KRW 2 trillion loans to provide liquidity to exporters; and KRW 2.5 trillion in guarantees at low guarantee rates.
For new loans, the limit will be increased up to 10%p higher than the existing loan limits, and for guarantees, up to 0.25%p will be offered.
Special Loans for Companies without Credit Ratings: KRW 200 billion loans to support small-and medium-sized exporters
To swiftly and effectively implement the government’s relief plans, Korea Eximbank will fast track its approval process for SMEs by reviewing financial statements, skipping non-financial assessment for credit rating determination, and cutting interest rates by up to 0.9%p.
In early February, Korea Eximbank established the COVID-19 Emergency Response System and prepared support measures to promptly respond to the affected companies.
Companies hit by the COVID-19 can receive financial counseling and support by contacting local branches and Economic Damage Report Centers of Korea Eximbank.