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© Reuters. A South Korea won note is seen in this illustration photo May 31, 2017. REUTERS/Thomas White/Illustration/Files
Exciting News! South Korea’s commercial banks have committed to providing 2 trillion won ($1.53 billion) to support small businesses, according to the organization representing the lenders. This is in response to political and regulatory pressure to give back more of their profits to society.
The Korea Federation of Banks, which represents 23 financial institutions including Kookmin Bank and Woori Bank, stated that out of the total, 1.6 trillion won will be used as cash refunds for interest payments borrowers have made. This will help them deal with the rising costs of living as interest rates climb.
There has been growing pressure on local lenders to share their profits, especially since the country’s four largest commercial banks saw a combined profit from lending activities of almost 33 trillion won last year, an increase of more than 20% from the previous year.
“Small business owners have been hit hardest due to factors including rising interest rates, even before things got better from the COVID-19 pandemic,” said Kim Joo-hyun, chairman of the country’s regulator Financial Services Commission, adding that the banks’ plan to offer financial support will help mom-and-pop businesses.
($1 = 1,303.1700 won)