KB Kookmin Bank becomes third lender to join after Hana Bank and Woori Bank, adding 200 billion won
Firms up to 7 years old led by entrepreneurs under 40 eligible; no collateral or guarantee fees
Interest rates in the 3% range aimed at easing financing burden on young founders
A youth startup financing program championed by Democratic Party of Korea lawmaker Jeon Hyun-hee has expanded to a total of 600 billion won ($448 million) with the participation of KB Kookmin Bank, offering startup funds at interest rates in the 3% range without collateral requirements to ease the financial burden on young entrepreneurs.
Jeon attended a signing ceremony for the youth startup financing program Thursday at KB Kookmin Bank's headquarters in Yeouido, Seoul. Also present were KB Kookmin Bank President Lee Hwan-joo, Korea Credit Guarantee Fund Chairman Kang Seung-jun and Korea Technology Finance Corporation Standing Director Jang Jin-yeop.
Under the agreement, KB Kookmin Bank will contribute 5 billion won in special contributions and 900 million won in guarantee fee subsidies to the Korea Credit Guarantee Fund and Korea Technology Finance Corporation, respectively. The bank plans to commit a total of 11.8 billion won to create a 200 billion won youth startup loan pool.
The program targets companies no more than seven years old whose representative is 39 or younger. A key feature is the elimination of collateral requirements and guarantee fees, with interest rates set in the 3% range to reduce borrowing costs.
The initiative is part of a broader youth startup financing effort that Jeon has been advancing together with the Korea Financial Industry Union. KB Kookmin Bank becomes the third lender to join, following Hana Bank and Woori Bank, bringing the total loan support pool to 600 billion won.
The program is designed to supply funding to young founders who have difficulty obtaining bank loans due to a lack of collateral or insufficient credit history, with the goal of stimulating startup activity and job creation.
"I am grateful to KB Kookmin Bank, the Korea Credit Guarantee Fund, the Korea Technology Finance Corporation and the financial workers' union for joining hands to put productive and inclusive finance into practice," Jeon said.
"Lowering the barriers to finance so that anyone can pursue their potential and ideas is the starting point of basic finance," Jeon added. "I hope the financial sector's participation and support will continue to grow so that this program can become a new ladder of opportunity for more young people."
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