South Korea municipal SME financing programs

In late July 2026 South Korean local governments expanded financial support for small‑ and medium‑size enterprises. Daejeon City announced a 1.8 trillion‑won loan package aimed at local manufacturers, offering a general management‑stability loan, region‑specific guarantees, startup competitiveness funds, and production‑support loans. The program includes preferential interest rates for firms classified as “Na‑num‑myeong‑mun” and those certified as family‑friendly, and an additional rate reduction for applicants using IBK Industrial Bank.

Earlier in the month, Seoul’s Gangdong district signed a special credit‑guarantee agreement with IKEA Korea, Woori Bank and KB Kookmin Bank, raising its guarantee fund by 10 billion won to 69.73 billion won. The scheme backs loans of up to 70 million won for small firms and sole proprietors lacking collateral, with repayment terms of up to five years at roughly 2.7 % interest. Since the start of the year the district has supported over a thousand firms, surpassing the previous year’s figures. Both initiatives reflect municipal efforts to stabilize small‑business operations amid persistent high inflation, interest rates, and exchange‑rate pressures.