South Korea will provide low-interest loans worth a total of about 60 billion won (US$50 million) to companies troubled by a government ban on trade with North Korea, an official said Monday.
The loans are aimed at alleviating the financial trouble of the companies, which started when South Korea implemented a ban in May in
retaliation for the March 26 sinking of its warship near the Yellow Sea border with North Korea, Unification Ministry spokesman Chun Hae-sung said in a briefing.
"Each company will be eligible to receive a loan of up to 700 million won with a 2 percent interest rate, based on the volume and type of trade the companies have been doing for the past year," he said, adding the measure will take effect next week.
Hundreds of companies had to stop trading with North Korea after South Korea announced that a multinational investigation found the communist state responsible for the Cheonan sinking, which claimed the lives of 46 sailors.
The South has blamed the sinking on an elusive North Korean submarine, demanding the North apologize and punish those involved in the attack. The U.S. and South Korea are also holding massive maritime drills in the East Sea this week in protest. The North denies any role in the sinking.