Shinhan Bank said on the 27th it will begin a loan support project for small and medium-sized companies to ease the burden of introducing retirement pensions with the Ministry of Employment and Labor and the Korea Credit Guarantee Fund.

SMEs have often faced difficulties adopting retirement pensions due to funding demands and liquidity constraints. The bank said it expects the loan support to ease those burdens and help the system take root.

The project began after Shinhan Bank proposed retirement pension loan support to the ministry in February. It was launched after working-level meetings and reviews of financial regulations with 10 commercial banks.

The loans target SMEs that introduce retirement pensions. The programme provides up to 500 million won in working capital per company through a Korea Credit Guarantee Fund agreement. Eligible firms can also receive support for guarantee fees of up to 0.5 percent points for three years.

A Shinhan Bank official said the initiative, which started from the bank’s proposal, is expected to ease the burden on SMEs and help more workers prepare for retirement in a stable environment. The official said the bank will continue to offer financial solutions through retirement pension products and services.