In response to the prolonged geopolitical risks in the Middle East, K-FINCO Construction Mutual Aid Association is expanding its support for members, which includes reducing guarantee fees, providing special loans, and offering legal assistance.
K-FINCO announced on July 6 that it is implementing comprehensive support measures in the areas of finance, law, and risk management through its 'Middle East War Crisis Response Task Force (TF)' to address the ongoing threat of war in the region.
Since launching the TF in May, the association has been assessing major risk factors that member companies may face, including rising raw material prices, supply chain instability, delays in construction cost settlements, increasing interest rates, and potential disputes related to overseas guarantees.
In the financial support sector, K-FINCO is collaborating with the Ministry of Land, Infrastructure and Transport to offer a 10% discount on guarantee fees for construction equipment rental payment guarantees and subcontractor payment guarantees, and a 30% discount on contract guarantees and performance bond extension guarantees.
The association has provided approximately 600 million won in financial support through the reduction of guarantee fees and is currently supporting a total of 266.3 billion won through its 'Construction Stability Special Loan' program.
Legal support is also being provided. K-FINCO held on-site legal support briefings for member companies in Daejeon in April and Daegu in June, with plans to continue regional briefings in the second half of the year. A tailored training program will also be offered to member companies utilizing overseas guarantees, covering overseas construction claim cases, key issues, and response strategies.
Additionally, on-site management support is being expanded. The association is monitoring the status of material supply and construction cost increases for major member companies and has distributed a contract management response guidebook. It is also assisting with practical responses such as negotiations for construction cost increases, requests for extensions, and adjustments to contract amounts due to price fluctuations.
To prepare for rising raw material prices and delays in construction cost settlements, K-FINCO is conducting on-site inspections and supporting claims for construction cost increases, as well as preventing unjust contract terminations.
For member companies facing significant burdens due to rising interest rates, K-FINCO has established a monitoring system to assess quarterly financial conditions based on debt ratios, liquidity, and business performance. The impact of macroeconomic variables such as interest rates and exchange rates on assets and guarantee portfolios is also regularly evaluated.
Lee Eun-jae, the chairman of K-FINCO, stated, "If external risks from the Middle East persist, member companies may face increased burdens through various channels such as raw material prices, financial costs, construction cost settlements, and overseas guarantee disputes. We will closely monitor the on-site situations of our members and continue to provide support in finance, law, and risk management to help stabilize their operations."
Meanwhile, K-FINCO announced on June 30 that it had held a '2026 Budget Execution Performance Review Meeting' at its headquarters in Dongjak-gu, Seoul, revealing that it had saved approximately 5.4 billion won in budget expenditures as of May this year.
* This article has been translated by AI.
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