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S. Korea moving to extend soft loans to firms with ties to N. Korea

S. Korea moving to extend soft loans to firms with ties to N. Korea

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Published : 2013-12-29 10:55
Updated : 2013-12-29 10:55

South Korea is pushing to extend special low-interest loans to companies with investments in North Korea that have been in trouble for years amid tensions on the Korean Peninsula, a government official said Sunday.

South Korea suspended a tour program to Mount Kumgang in 2008 when a female South Korean tourist was shot dead near the scenic resort on the North's east coast.

Hundreds of local companies involved in projects in North Korea suffered another setback in 2010 when Seoul imposed sanctions on Pyongyang over the deadly sinking of a South Korean warship blamed on the North.

"Soft loans are likely to be extended in January or February next year, though the original plan for the loan program has been delayed somewhat," the official said on condition of anonymity.

It will mark the first time for the current government to extend special loans to companies that have business ties with North Korea, except for those operating in the inter-Korean industrial complex of Kaesong in the North Korean border city of the same name.

In 2010 and 2012, South Korea extended special loans worth 56 billion won (US$53.1 million) to 221 local companies involved in cross-border projects with North Korea.

Last week, Seoul's Unification Minister Ryoo Kihl-jae promised to make such soft loans during a rare meeting with several South Korean investors whose businesses with North Korea have been suspended in recent years due to the two incidents.

The Kaesong factory park, the last remaining symbol of inter-Korean cooperation, resumed operations in September, more than five months after the North unilaterally shut it down in anger over South Korea-U.S. joint military exercises. (Yonhap news)

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