November 27, 2024

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Industrial Bank of Korea CEO Kim Sung-tae (Industrial Bank of Korea)

Industrial Bank of Korea is intensifying its efforts to support small businesses struggling with the economic downturn and high interest rates.

Last month, the state-run lender unveiled a comprehensive support plan, extending the interest rate reduction period for government-backed small business loans by a year with a 130 billion won ($93 million) investment. It will also allocate 28 billion won to dedicated loan funds and 14 billion won to preferential rates on savings and debt restructuring.

The bank will also continue nonfinancial support, including a tailored policy funding recommendation system and an expanded franchise startup program.

IBK has been actively supporting struggling small businesses, providing the largest policy funding loans in the banking industry, totaling 12.6 trillion won, along with an additional 10.2 trillion won in specialized loans. Just this year, the bank has allocated 28.8 trillion won to small businesses, making up 55 percent of its total SME loans.

The bank has also enhanced its support through a tech partnership. In August, it teamed up with Naver Cloud and artificial intelligence startup Heum Labs to drive innovation using AI, collaborating on AI-driven management services, tailored training and joint marketing through tax refund partnerships.

Notably, the "interactive management support service," combining IBK’s expertise, Naver Cloud's HyperClovaX and Heum Labs' AI, will enhance small business productivity by handling tasks like tax consultations, document issuance and contract creation.

IBK also advanced environmental improvements through the "IBK Hope Design" initiative, a design-driven program focused on enhancing business environments and revitalizing local areas through consistent support.

In September, IBK replaced awning fabric at 37 stores in Seoul’s Yeomcheon handmade shoe street and Daegu’s Daesin-dong sock alley, the same locations where it had replaced signboards and installed awnings previously. Environmental improvements at the Chungbuk Industrial Materials Distribution Complex in Cheongju are also set for completion in November.

By Choi Ji-won (jwc@heraldcorp.com)