NH Nonghyup Bank said on Tuesday it signed an agreement with the Ministry of Employment and Labor, the Korea Social Enterprise Promotion Agency and the Korea Credit Guarantee Fund to promote an interest-subsidy programme for social enterprises. The bank said the deal aims to improve social enterprises' access to finance and reduce their borrowing costs.

Social enterprises help realise social value by creating jobs for vulnerable groups and providing social services, but many often struggle to secure working capital due to a lack of collateral and credit constraints.

The loan product under the agreement is scheduled to be launched in February. After the Korea Social Enterprise Promotion Agency announces the programme, applicants can obtain a guarantee certificate through the Korea Credit Guarantee Fund and apply for a loan at NH Nonghyup Bank.

The loan limit is up to 300 million won. For new working capital, borrowers can receive support for the interest rate difference of 2.5 percentage points a year for 1 year.

Eom Eul-yong (엄을용), head of corporate finance at Nonghyup Bank, said the bank has proven itself as a financial institution that grows with local communities by receiving the top grade for 6 consecutive years in the financial companies' local reinvestment evaluation results. He said it will continue to expand financial support for social solidarity economy organisations that lead efforts to protect vulnerable groups and create social value, and will keep practising inclusive finance.