IBK Industrial Bank of Korea will provide a total of 100 billion won in financial support to small and midsize auto semiconductor partner companies facing difficulties in raising funds, teaming up with Hyundai-Kia and the Korea Technology Finance Corp.

IBK said on July 30 it signed a business agreement with Hyundai-Kia and the Korea Technology Finance Corp on “win-win financial support for Hyundai-Kia partner semiconductor companies.”

The programme was set up to support partner SMEs whose funding burden has grown due to global economic uncertainty, fluctuations in raw material prices and the shift to future vehicles, and to enhance supply chain stability and competitiveness in the auto industry.

IBK and Hyundai-Kia will pay special contributions to the Korea Technology Finance Corp to raise funds for the programme. IBK plans to supply low-interest guaranteed loans to partner SMEs based on the funds.

Eligible companies will receive benefits including loan rate cuts of up to 1.3 percentage points and full support for guarantee fees for the first 2 years. The total size of the financial support is 100 billion won.

An IBK official said the programme was a win-win finance model in which a financial institution, an automaker and a guarantee agency cooperate to support strengthening SMEs' competitiveness, adding it would expand tailored financial support programmes.