S.Korea to increase credit for exporters on prolonged eurozone crisis

SEOUL, Sept. 4 (Xinhua) -- South Korea's state-run trade bank was allowed to increase its credit for exporters amid lack of credit from European commercial banks arising from the prolonged eurozone debt crisis, the finance ministry said Tuesday.

The South Korean government decided at a cabinet meeting to increase the Export-Import Bank of Korea (Eximbank)'s credit as the European banks cannot provide the same credit as they once were able to, owing to the protracted eurozone debt crisis,the Ministry of Strategy and Finance said.

The ceiling of credit that can be offered to large conglomerates will be raised to eight-tenths of the trade bank's equity capital, up from the previous five-tenths. The hike will allow the Eximbank to offer up to 7.1 trillion won (6.27 billion U. S. dollars) in credit to large conglomerates, up from the prior 4. 4 trillion won.

The credit limit for corporations and individual companies will be lifted from four tenths of the banks'capital to six tenths, while the ceiling for credit classified as "large loans" will rise from 5 folds of the capital to six folds.

Accordingly, corporations and individual companies can receive up to 5.3 trillion won in credit from the Eximbank, up from the previous 3.5 trillion won, while the ceiling for large loans will be raised to 44.5 trillion won to 53.4 trillion won.

Financial support was becoming important to businesses bidding for large overseas projects as they were required to submit financing plans along with their bids, the ministry said, noting that the increase was expected to help local businesses participate in large international projects. Enditem