The South Korean government announced on March 26 an expanded loan program offering interest rate subsidies to small and medium-sized manufacturers of eco-friendly vehicle components. (Image courtesy of Yonhap)
SEOUL, March 27 (Korea Bizwire) – The South Korean government announced on March 26 an expanded loan program offering interest rate subsidies to small and medium-sized manufacturers of eco-friendly vehicle components, part of its ongoing push to strengthen the nation’s green automotive sector.
Under the program, eligible companies can receive loans of up to 10 billion won, with the government subsidizing interest rates by 1.5 to 2 percentage points for up to eight years. Small businesses will receive the higher 2 percentage point subsidy, while medium-sized enterprises qualify for the 1.5 percentage point reduction.
The Ministry of Trade, Industry and Energy plans to provide loan guarantees worth approximately 320 billion won this year. The ministry has also expanded the number of participating banks from eight to 10 to increase accessibility.
The subsidized loans can be used for facility investments, mergers and acquisitions, or research and development projects related to eco-friendly vehicle components. Since the program’s inception in 2022, 69 companies have received support, with 71% using the funds for facilities, 28% for R&D, and 1% for M&A activities.
Companies seeking support must undergo both a recommendation review and a bank screening process. The ministry will accept applications from March 27 through April 21.
Kevin Lee (kevinlee@koreabizwire.com)
