November 25, 2024

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The headquarters of KB Kookmin Bank in Yeouido, Seoul (KB Kookmin Bank)

KB Kookmin Bank said Wednesday it will provide 372.1 billion won ($276.4 million) in financial support measures for the self-employed, small business owners and vulnerable groups facing difficulties due to high borrowing costs and prices.

The sum represents the largest among such other plans put forward by its local peers responding to the government’s call to share profits yielded from high rates with those still struggling to recover from the fallout of COVID-19.

KB’s dual-track supportive package includes a cash refund scheme for its customers on their loan payments, amounting to 308 billion won. The other part is making charitable donations of cash for economically vulnerable people.

“We hope that the financial support will expand the ladder of opportunity and serve as a priming water for small business owners and self-employed people who are working to recover from fallouts of the COVID-19 pandemic to overcome the management crisis,” the bank said in a statement.

Until March, the lender will offer cash refunds of up to 3 million won to individual borrowers who extended a loan of less than 200 million won for longer than one year with an interest rate exceeding 4 percent.

The bank expects some 320,000 self-employed businesspeople and small store owners to benefit from the program.

It also plans to run a scheme worth 63.3 billion won to provide practical help to vulnerable groups, including small business owners, with donations to guarantee agencies or the Korea Inclusive Finance Agency.

The announcement came after some 18 Korean commercial banks jointly pledged to offer 2 trillion won to help small businesses in December, after facing harsh criticism from financial authorities for enjoying record earnings mainly generated from rising interest rates.

Before KB Kookmin Bank's Wednesday announcement, other major lenders unveiled their own measures. KEB Hana Bank will provide a 355.7 billion-won package, while Shinhan Bank, Woori Bank and NH Nonghyup Bank decided to commit 306.7 billion won, 275.8 billion won and 214.8 billion won, respectively.

By Park Han-na (hnpark@heraldcorp.com)