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'Green finance' trend changing S. Korean banking culture Updated: 2021-05-18 13:34:53 KST

The global economy is pivoting from fossil fuels to cleaner alternatives like solar power or wind energy.
But the high cost of installing and managing new clean energy systems puts off some entrepreneurs.
So financial institutions are stepping up, to support small and medium-sized enterprises that want to go green.

"Banks in South Korea are rolling out various loan packages, green investment funds, and even bonds for sustainability, to encourage clients to reduce their carbon footprint."

"We're offering loans with preferential interest rates for corporate customers that engage in environmental activities. We're also providing 'green consulting' free of charge, to help firms with their eco-friendly management."

"We have cut interest rates by 0.2 to 0.3 percent on loans for environmentally and socially responsible companies, and their affiliates as well."

Some products target individual customers as well.

"We provide interest rate cuts of up to 4 percent on mortgages for customers that own or are buying eco-friendly cars. We also offer a 1 percent rate cut on mortgages for customers that own environmentally-sound houses."

The Korea Credit Guarantee Fund, Korea Technology Finance Agency, and Korea Energy Corporation are also joining forces, to make it easier for firms to get loan guarantees for green projects.

"In the past, firms looking for loan guarantees were evaluated by their credit worthiness and technological skills. Under the 'green guarantee program', businesses are assessed on carbon evaluations and the potential of their green projects, which makes it easier for startups to get loan guarantees."

The South Korean government plans to double its financial support for green finance projects by 2030, to boost green growth, and build the foundations for a carbon neutral society.
Kim Jae-hee, Arirang News.
Reporter : jhee@arirang.com
KOGL : Korea Open Government License
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