The South Korean government will earmark near 500 trillion won ($454.2 billion) in cheap policy loan for small and mid-sized companies and self-employed to help them sustain businesses through protracted Covid-19 storm.

The Ministry of Economy and Finance said Tuesday that it is set to announce a measure to inject more than 490 trillion won worth liquidity at the emergency economic meeting on Wednesday. It plans to terminate special support measure for SMEs but increase the overall budget for policy financing to above the pre-pandemic levels.

The government decided to offer 300 trillion won or 61 percent of the liquidity injection to SMEs to allow them to raise emergency funds with low borrowing costs.

It will set aside 2.5 trillion won for loan guarantee scheme for mom and pop stores to provide them easier access to loans.

The plan came after the government had concluded that the last year’s more than 500 trillion won worth policy lending program contributed to mitigating Covid-19 shock to the real economy. A government official said the government will continue to ramp up support for small business owners as the prolonged pandemic has exacerbated economic polarization.

About 100 trillion won will be spent on strengthening competitiveness of industries, and 17 trillion won will be offered to support the government’s economic stimulus policy dubbed Korean New Deal initiatives.

By Yang Yeon-ho and Choi Mira

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]