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BOK to expand financial support for pandemic-hit small merchants

All News 12:00 September 23, 2020

SEOUL, Sept. 23 (Yonhap) -- South Korea's central bank said Wednesday it will further expand financial support for smaller merchants and firms to help them ease a funding squeeze amid the new coronavirus outbreak.

The Bank of Korea (BOK) said it has decided to raise the cap on its low-rate loans to banks by 8 trillion won (US$6.88 billion) to 43 trillion won. The decision will be approved by the BOK's monetary board Thursday.

Under the scheme, the BOK provides funds to local banks at an interest rate of 0.25 percent to encourage them to extend lending to smaller merchants and companies.

Of the newly added funds, 3 trillion won each will be set aside for small merchants and companies that have suffered financial damage from the virus outbreak.

The remaining 2 trillion won will be reserved for lending to startups and parts and equipment producers to support their facility investment, the BOK said.

Banks' loans to smaller firms and self-employed people grew 6.1 trillion won in August, as they took out fresh loans to cushion the virus fallout, according to separate data from the central bank.

In this photo, taken April 6, 2020, a local customer (L) is seen having an interview with a bank official in Seoul for a special, low-interest loan for businesses hit by the COVID-19 pandemic. (Yonhap)

In this photo, taken April 6, 2020, a local customer (L) is seen having an interview with a bank official in Seoul for a special, low-interest loan for businesses hit by the COVID-19 pandemic. (Yonhap)

sooyeon@yna.co.kr
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