Bank of Korea (BOK), South Korea's central bank, decided on Thursday to expand soft loans to small businesses as part of efforts to offer financial support to small startups and help them create jobs.

BOK Governor Kim Choong-soo and the monetary policy board members decided to expand aggregate ceiling loan to small businesses to 12 trillion won (11 billion U.S. dollars) from 9 trillion won.

Three trillion won will be allocated to the newly established funds for small startups that have a business year of less than 7 years.

The ceiling in loans for exporters was raised to 1.5 trillion won from 0.75 trillion won as local exporters have been under pressure amid the depreciation of the Japanese yen, the central bank said.

In a bid to reduce borrowing costs of small companies, the BOK will cut the interest rates for the soft loans to a range of 0.5-1. 25 percent from the current 1.25 percent.

The BOK estimated that the soft loan expansion would induce banks to increase loans to small startups by 6-12 trillion won. Endi

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