Bank of Korea Revamps Financial Support Loan System, Launches SME Credit-Linked Program on July 23

According to the Bank of Korea, the central bank revamped its financial intermediation support loan system on July 23, introducing a new credit-linked support program for small and medium-sized enterprises (SMEs) and expanding regional SME assistance.

The BOK's monetary policy committee approved amendments to the Financial Institutions Loan Regulations and finalized the restructuring plan. The core initiative is a newly created "SME Credit-Linked Support" program designed to flexibly adjust credit limits and rates based on economic conditions. The program targets all SMEs (excluding specific sectors and policy-linked loans) and allocates limits based on quarterly net increases in bank SME lending. Higher weightings will be given to low-credit-rated, unsecured, and newly established enterprises. The program is scheduled for implementation in the second half of 2027. Additionally, the BOK plans to expand the "Regional SME Support" program, which has maintained a fixed limit of 5.9 trillion won since 2014, with implementation expected in the first half of 2027. The total financial intermediation support loan limit of 30 trillion won will be maintained.