Shinhan Bank will join hands with the Korea Technology Finance Corporation (Kibo) to support small and medium-sized firms that have suffered damage from instability in the Middle East.

Shinhan Bank said on Thursday it signed an agreement with Kibo for inclusive financial support to help SMEs overcome crises stemming from the Middle East war and other factors.

Under the agreement, Shinhan Bank will contribute a total of 4 billion won, including 2.5 billion won in special contributions and 1.5 billion won in guarantee fee support. Using the funds, Kibo will supply guarantees worth a total of 200 billion won, including 50 billion won in special contribution-backed guarantees and 150 billion won in guarantee fee support-backed guarantees.

Companies using the special contribution-backed guarantees will receive a 100 percent guarantee ratio for 3 years and up to a 0.4 percentage point cut in guarantee fees, depending on the type of damage. For companies using the guarantee fee support-backed guarantees, Shinhan Bank will support guarantee fees by up to 0.5 percentage point for 2 years.

A Shinhan Bank official said, "I hope this agreement helps SMEs facing heavier management burdens due to instability in the Middle East secure needed funds in a timely manner and reduce financing costs."