The amount of state funds used to provide cheap loans for small and mid-sized enterprises(SMEs) will increase next year by around 450 billion won.

SMEs and Startups Minister Hong Jong-haak announced Tuesday that a total of three-trillion-335 billion won has been earmarked for an SMEs policy fund, marking an increase of four-point-two percent from this year.

The biggest portion of spending, at one-trillion-866 billion won, will be used for startups, followed by a fund for new growth engines at 880 billion won, while 490 billion won will go to market development.

The loans will be provided with interest rates of between two percent and three-point-35 percent for up to ten years.