[DigitalToday reporter Ji-young Lee] Hana Bank is expanding a public-private cooperation model to support partners in the construction equipment industry, stepping up financial support for small and midsize companies. It reflects the sector's heavier burden from high oil prices and rising raw material prices, combining liquidity support with cost reductions.

Hana Bank said on April 30 it has signed a business agreement with HD Hyundai Construction Equipment and the Korea Credit Guarantee Fund to support shared growth in the construction equipment industry. The agreement is designed to support small partner firms in the sector with technology development and expanded exports.

The three organisations will create a 5 billion won fund and pursue financial support of up to 85 billion won. Hana Bank will contribute 4 billion won and HD Hyundai Construction Equipment 1 billion won. They also plan to consider additional contributions depending on future demand.

Support will be provided to partner companies recommended by HD Hyundai Construction Equipment, with preferential guarantee ratios from the Korea Credit Guarantee Fund of up to 100 percent and reduced guarantee fees. Benefits to lower financial costs will also be offered, including lower loan interest rates and preferential exchange rates.

The support programme will operate on two tracks. It includes a 40 billion won joint project guarantee for companies participating in innovation projects such as new model development and mass production, and a 45 billion won shared-growth support guarantee for all partner firms.

Lee Ho-sung (이호성), chief executive of Hana Bank, said the agreement is aimed at providing practical financial support to small companies struggling with high oil prices and rising raw material prices. He said the bank will continue to expand support to stabilise management at export-oriented small firms and strengthen industrial competitiveness.