Busan is rolling out its largest-ever policy financing package to shield local businesses from external shocks, including the prolonged Middle East conflict and a surging exchange rate. The city has positioned the program as a "preemptive financial safety net" aimed at preventing short-term liquidity crises and easing cost burdens.
The Busan Metropolitan Government said Thursday that it has allocated a total of 1.368 trillion won in working capital for small and medium-sized enterprises (SMEs) through a supplementary budget, up 500 billion won from the previous level, with disbursements beginning earlier this month. The amount is the largest among Korean cities and is intended to provide breathing room for companies whose funding conditions have deteriorated amid rising raw material prices and a high exchange rate.
Funding will be provided through 14 commercial banks after applicants receive a recommendation following a review by the Busan Economic Promotion Agency. In particular, the city will grant a six-month deferment on principal repayments for corporate loans maturing this year and provide an interest subsidy of 1.0 to 2.5 percent to directly reduce the interest burden.
The city is also establishing a 100 billion won specialized fund for joint raw material procurement, with participation from the Busan-Ulsan branch of the Korea Federation of SMEs and BNK Busan Bank. Under the structure, the city will raise the interest subsidy rate to 2.0 percent while the bank applies preferential rates, providing up to 800 million won per company (1 billion won for designated local enterprises).
Including separately allocated programs — 200 billion won in special funds for global risk response, 200 billion won in currency care financing and 800 billion won for small merchants — the total volume of financial support targeting the regional economy has expanded further.
The measures respond to a rapid deterioration in business sentiment. According to a survey by the Busan Chamber of Commerce and Industry, local companies cited "rising raw material and energy costs" (43.3 percent) and "increased exchange rate volatility" (31.7 percent) as the biggest risks for the first half.
"The key is to supply policy funds in a timely manner to secure business continuity amid prolonged external uncertainty," a city official said. "We will continue to expand tailored financial support that reflects feedback from the field."
