KB Kookmin Bank is launching a financial support program aimed at easing the interest burden for small business owners. The initiative will automatically apply a portion of the interest exceeding 5% on business loans toward principal repayment, thereby reducing both interest and principal repayment obligations.
On May 10, KB Kookmin Bank announced that it will implement a program for small business loans where any interest amount exceeding 5% will be used to pay down the loan principal. This program is part of KB Financial Group's 'KB Kookmin Happiness Hope Project' and is set to begin later this month. When small business owners extend their existing loans and the interest rate exceeds 5%, the excess interest (up to 4 percentage points) will be automatically applied to the principal repayment.
As a result, the outstanding loan balance will decrease, leading to a reduction in future interest payments, which is expected to alleviate financial costs for small business owners. Additionally, borrowers will be exempt from prepayment fees when using excess interest payments for principal repayment.
The program is targeted at small business owners with low credit ratings who hold Korean won loans with interest rates above 5%. Certain sectors, such as real estate, and borrowers who are in default will be excluded from this initiative.
A representative from KB Kookmin Bank stated, "We expect that more than 10,000 small business owners will benefit from this program, and we will continue to fulfill our social responsibility by implementing various inclusive finance initiatives for vulnerable groups."
* This article has been translated by AI.
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