The Korea Development Bank, a major South Korean policy lender, plans to provide 2.5 trillion won ($2.2 billion) to 200 promising small and medium-sized companies, a senior bank official said Tuesday.

Kim Keon-yeol, an executive director of the KDB, said in a seminar at the National Assembly that the proposed injection of the funds will begin next year and is meant to nurture small and medium-sized companies.

Kim said nurturing small and medium-sized companies into intermediate ones has gained urgency to strengthen momentum for economic recovery and find new growth engines.

The policy lender said it will work out details on the interest rates and selection of the companies for its special program.

South Korea has been working to provide a so-called "growth ladder" to ensure small and medium-sized companies can grow into intermediate firms while continuing to receive tax, and research and development support from the government.

Some small companies are reluctant to grow into mid-sized firms as they lose a series of state support benefits once they become mid-sized companies. (Yonhap)