Posco, KB Kookmin Bank launch supply chain finance for steel suppliers

Posco and KB Kookmin Bank have signed a memorandum of understanding to establish a dedicated supply chain finance service for suppliers in the steel industry. The partnership aims to enhance liquidity for partner companies by providing easier access to funding during periods of delayed payments or collateral shortages. This initiative represents a significant collaboration between South Korea’s manufacturing and financial sectors to stabilize the industrial supply chain amidst a prolonged market downturn.

Posco President Lee Hee-geun and KB Kookmin Bank CEO Lee Hwan-ju formalized the agreement at the Posco Center in Seoul to address the financial challenges facing steel industry suppliers. The new program is designed to connect Posco’s extensive network of partner companies directly with the bank’s lending infrastructure. By integrating these financial services into the "My Posco" platform, the partners intend to streamline the entire credit lifecycle, allowing suppliers to manage everything from loan applications to disbursements digitally.

Under the terms of the MOU, KB Kookmin Bank will take on the responsibility of managing payment settlements and providing specialized loans to Posco’s suppliers. Beyond traditional financing, the bank will also offer environmental, social, and governance (ESG) consulting services to help these companies meet modern regulatory and corporate standards. The service is scheduled for a full launch later this year, following a joint briefing session intended to educate partner companies on the specific financial benefits and support measures available to them.

A primary incentive for participating suppliers is the provision of preferential interest rates, which Posco claims will be among the lowest in the industry. These reduced rates are intended to help smaller firms secure necessary liquidity while minimizing the high financing costs associated with the current economic climate in the steel sector. Posco leadership described the initiative as an evolution of their "coexistence cooperation model," positioning it as a template for future collaboration between major industrial players and financial institutions in South Korea.