KB Kookmin Bank is stepping in to ease the funding burden on small and medium-sized companies struggling due to the Middle East war and the effects of high oil prices and a weak won.

KB Kookmin Bank said on Thursday it signed an agreement with the Korea Technology Finance Corp on inclusive financial support to help SMEs overcome a crisis stemming from the Middle East war and related factors.

Under the agreement, KB Kookmin Bank plans to make a special contribution of 5 billion won to the Korea Technology Finance Corp and provide about 230 billion won in guarantee-backed loans. This includes 60 billion won in agreement-backed guarantees linked to the special contribution and about 170 billion won in agreement-backed guarantees with guarantee-fee support.

Eligible firms include those that meet the Korea Technology Finance Corp’s technical requirements, including companies exporting directly to the Middle East, companies harmed by disruptions to Middle East crude oil supply chains, and companies facing management difficulties due to a weaker won and higher logistics costs.

Key beneficiaries include Middle East exporters of automobiles, power equipment, air-conditioning units and air conditioners, as well as raw material demand companies such as those in petroleum, chemicals and plastics manufacturing.

Eligible companies can receive a preferential 100 percent guarantee ratio for 3 years through the agreement-backed guarantees tied to the special contribution. Companies using the agreement-backed guarantees with fee support will also be offered guarantee-fee support totaling 1.2 percentage points over 2 years.

A KB Kookmin Bank official said, "We hope this will help stabilize management at SMEs struggling due to the impact of the Middle East war," adding, "We will continue financial support for SMEs amid changes in the external environment."