KB Kookmin Bank said on December 3 it signed a cooperation agreement with Korea Credit Guarantee Fund and Korea Technology Finance Corporation to strengthen productive finance and improve global competitiveness, aiming to support the growth of small and mid-sized companies.

The agreement follows a deal KB Kookmin Bank signed in September with the Small and Medium Business Corporation to expand productive finance.

The bank will provide 14 billion won in contributions from December 5, including 5 billion won each to the two guarantee agencies and 2 billion won each in fee support, to back loans worth about 400 billion won secured by the guarantee certificates.

Companies eligible for the special contribution guarantee will receive a full guarantee ratio for three years and up to a 0.3 percentage point fee reduction. Companies eligible for fee support will receive fee reductions of 1.0 percentage point per year for two years, totalling 2.0 percentage points.

Priority support goes to companies that benefit from or are expected to benefit from the Small and Medium Business Corporation’s policy funds. Eligible categories include firms in new growth industries, promising start-ups, exporters, job-creating firms and companies registered on the SME technology market under Korea Credit Guarantee Fund. Categories under Korea Technology Finance Corporation include firms strengthening technological competitiveness in key industries, firms enhancing export competitiveness, companies boosting overall SME competitiveness, start-up ecosystem firms and sustainability growth firms.

The bank will prioritise companies already using or expected to use policy funds, strengthening links with the programme. It also plans to include major guarantee target groups under the two guarantee agencies to improve competitiveness of companies in national core industries and expand productive finance.

A KB Kookmin Bank official said the support is expected to help small and mid-sized companies, which form the core of the Korean economy, strengthen global competitiveness. The official said the bank will continue to provide stable funding and reduce financing costs for SMEs to build a productive financial ecosystem.