The Bank of Korea made available a total of $7.28 billion in low-interest loans for small and medium-sized enterprises in a bid to reinvigorate the economy.
The massive provision of low-interest loans will help expand the country’s growth potential by helping SMEs export more as well as increase their facilities investment. It will also help to forge a more favorable environment for start-ups.
Economists agree that making small and medium-sized firms more competitive and productive is a key part of the effort to strengthen the country’s growth potential. What is important is to find and focus on more effective and efficient ways to support SMEs. But existing programs are too complicated and remain out of touch with the changing economic environment.
A growing number of small and medium-sized companies have been driven into marginal conditions in the decades since Korea was hit by a foreign exchange crisis in 1997. In this regard we need to put priority on strengthening support for SMEs that ship their goods abroad and explore opportunities in emerging markets,
including India, Iran, Vietnam and Myanmar. In this context, support for SMEs will be concentrated on those “capable of selling products” abroad.
Currently, only 3 percent of SMEs ship their goods overseas. we should push to increase the number of
first-time exporters. Focusing support on exporters can be a turning point in solving the problem of marginalized SMEs. Encouraging more SMEs to export goods will help the country adapt to changing conditions and fluctuating demand in global markets especially in ASEAN countries such as Myanmar.