In an urgent response to the protracted crisis in the Middle East, the Ministry of SMEs and Startups, led by Minister Hong Sang-sook, along with the Korea SMEs and Startups Agency (KOSME), chaired by Kang Seok-jin, has announced a strategic allocation of 5.5 trillion won (approximately $4.1 billion) in policy funds aimed at stabilizing the economy for small and medium enterprises (SMEs).
This funding initiative will address pressing challenges posed by high exchange rates, soaring oil prices, and raw material volatility.
This decision comes on the heels of the supplemental budget bill passing through the National Assembly on October 10, enabling KOSME to enhance its policy funding significantly.
The allocated amounts include: - **Emergency Management Stabilization Fund**: 2.5 trillion won - **Innovation Startup Commercialization Fund (Startup Base)**: 1.5 trillion won
- **New Market Entry Support Fund (Globalization for Export Firms)**: 1 trillion won - **Re-Startup Fund**: 500 billion won
The Emergency Management Stabilization Fund is particularly vital, with an increase of 2.5 trillion won intended to alleviate temporary management difficulties experienced by SMEs heavily reliant on import-export activities in the Middle East.
This fund will prioritize companies in the petrochemical supply chain, especially those producing disposable products like syringes, as they face unique pressures from fluctuating materials costs.
Additionally, enterprises grappling with global supply chain disruptions, rising freight costs, and adverse payment conditions will receive targeted support to mitigate their operational burdens.
Furthermore, to assist technology-driven startups struggling with financial access through private financial institutions, the Innovation Startup Commercialization Fund will inject an additional 1.5 trillion won.
This fund aims to invigorate the startup ecosystem by focusing on innovative sectors, such as artificial intelligence, deep tech, and other cutting-edge industries.
Aligning with the strategic framework of the ‘Venture 4 Power Nations Comprehensive Plan’, the Re-Startup Fund of 500 billion won has been earmarked to support entrepreneurs facing the risk of business failure, promoting a robust culture of second chances in entrepreneurship.
To bolster export competitiveness amid rising uncertainties, particularly for SMEs venturing into new markets, KOSME will allocate an additional 1 trillion won in the New Market Entry Support Fund.
This initiative is designed to facilitate access to alternative markets for SMEs requiring market diversification and support expenses associated with overseas marketing and certifications.
Beginning October 21, affected companies can submit emergency management stabilization fund applications.
Specific inquiries can be directed to any of the 34 KOSME regional offices or through the policy funds call center at 1811-3655.
Kang Seok-jin, the head of KOSME, emphasized the importance of safeguarding the stability of SMEs amidst the volatile landscape sparked by events in the Middle East.
He stated, “Swift execution of this supplementary budget is paramount for restoring economic vitality among export firms and startups.” Kang further committed to a thorough examination of current funding challenges faced by businesses to ensure timely and practical assistance is delivered to those in need.
