IBK Industrial Bank of Korea is joining hands with the Korea Credit Guarantee Fund and the Korea Technology Finance Corp to expand support for inclusive finance and productive finance.

The bank said on 4 June it signed a business agreement on financial support to expand inclusive and productive finance with the two guarantee institutions.

The total support will amount to 1.5 trillion won. The bank will supply 500 billion won for inclusive finance and 1 trillion won for productive finance.

Inclusive finance will target small and medium-sized companies in policy blind spots, including small businesses, graduated start-ups and traditional manufacturing. The bank will cut loan rates by up to 1.3 percentage points and cover the full first-year guarantee fee.

Productive finance will focus on sound small and medium-sized companies operating in high-growth fields such as future strategic industries. Eligible companies will receive loan-rate cuts of up to 1.3 percentage points and support for guarantee fees of up to 0.8 percentage points for 2 years.

The bank plans to use the agreement to lower financial costs for small and medium-sized companies with heavy funding burdens and to increase investment capacity for firms with growth potential.

An IBK official said the agreement was a comprehensive support package for small and medium-sized companies in policy blind spots and future growth companies, and that it would serve as a solid backstop for small and medium-sized firms.