Export-Import Bank ups ante for aid

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Export-Import Bank ups ante for aid

The state-run Export-Import Bank of Korea will provide 74 trillion won ($68 billion) to help companies during the prolonged global downturn, its chief said yesterday.

The amount is slightly more that the 72 trillion won executed the previous year. Fifty trillion won will be extended in loans, with the remainder going for loan guarantees.

“There’s a high chance that Korean exporters may lose overseas orders to Chinese or Japanese rivals. With a weaker yen and sluggish domestic demand, Japanese firms have been very eager to expand their offshore foothold,” said bank Chairman Kim Yong-hwan.

The bank plans to spend 21 trillion won on local exporters’ overseas plant projects, up from 19 trillion won last year.

To get in step with President-elect Park Geun-hye’s commitment to bolster small and medium enterprises, the bank has set aside 25 trillion won, or 45 percent of total annual lending, for smaller businesses.

“SMEs are more vulnerable to exchange rate risks as opposed to larger companies that generate a considerable revenue from their overseas production lines,” said Kim.

“So we’re also trying to boost mutual cooperative programs between big firms and their smaller subcontractors to stave off such downside factors.”

The incoming government has vowed to focus policy on helping SMEs grow and weather the bleak economic conditions forecast for this year. The Export-Import Bank’s move came on the heels of similar plans unveiled late last month by the state-run policy lender to extend more credit to smaller firms.

For shipbuilders and shipping companies struggling from faltering global demand, the policy lender will provide 5 trillion won, it said.

In addition to the lending plan, the Export-Import Bank plans to diversify its foreign borrowing portfolio this year with a target of $10 billion won through bond sales. It raised a total of $11 billion won in 2012.

Yonhap

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