Banks to roll over lending to smaller firms by end-June

SEOUL, Dec. 28 (Yonhap) -- South Korean lenders plan to roll over their loans to
smaller firms by an additional six months until the end of June in a bid to ease
their funding squeeze, an industry association said Monday.

In the midst of the global financial meltdown, Korean banks decided in February
to extend the maturity of their lending to small and medium enterprises (SMEs) by
the end of this year.
"Amid lingering economic uncertainty both at home and abroad, smaller companies
could be hurt if banks withdraw their loans to SMEs hastily or other supportive
measures," the Korea Federation of Banks said in a statement. "The scheme will be
extended into the end of June next year."
The move is in line with the government's intent to ease the transition, as swift
implementation of an exit strategy could prompt a possible funding squeeze for
smaller firms.
The financial watchdog said that it will extend the deadline on state loan
guarantees for smaller companies by an additional six months until the first half
of next year and plans to gradually lower the portion of state-credit guarantees
to 85 percent.
Currently, the government provides guarantees for lending to smaller firms by up
to 95 percent.
sooyeon@yna.co.kr
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