SME Policy Fund

SME Policy Fund

Funds Korean startups and small and medium-sized enterprises through low-interest loans managed by KOSME and the Ministry of enterprise and innovation support.

The SME Policy Fund is South Korea's primary government-backed loan facility for startups and small and medium enterprises, operated by KOSME (Korea SMEs and Startups Agency) under the Ministry of SMEs and Startups (MSS). In 2026, the fund allocates KRW 4.4313 trillion — approximately USD 3.3 billion — split between KRW 4.0643 trillion in direct loans and KRW 367 billion in interest subsidies on private-bank loans. MSS announced the 2026 plan on December 22, 2025, restructuring the fund toward a demand-driven, digitalized model with priority on AI transformation, regional growth, and export-oriented sectors.

Applications are managed through the Policy Fund Navigator, a digital guidance tool embedded in the KOSME online funding system that launched January 5, 2026. Founders input company age, export record, and intended use of funds to receive a program recommendation. Sub-tracks include the KRW 140 billion AX Sprint Preferential Track for AI transformation companies, which raises the maximum loan balance from KRW 6 billion to KRW 10 billion and provides interest discounts alongside accelerated evaluations. The K-Beauty Loan sub-track carries KRW 40 billion in total supply and a per-company annual cap of KRW 300 million. Over 60% of total policy funding — KRW 2.44 trillion — is designated for companies outside the Seoul capital region to correct geographic concentration in prior years.

The fund also allocates KRW 250 billion to an Emergency Management Stabilization Fund for companies facing temporary financial shocks, and KRW 70 billion to an Overseas Subsidiary Support Fund for Korean firms with international operations. A one-strike-out rule bars companies that intentionally misuse funds from future access. Because this facility is overwhelmingly loan capital rather than non-dilutive grants, applicants carry standard repayment obligations, though interest rates are set below commercial market rates.