Starting in July, the government will provide five trillion won in loans to subcontractors in key industrial sectors to help them cope with the economic fallout of the COVID-19 pandemic. 

Finance Minister Hong Nam-ki unveiled the plan on Friday during a meeting with economy-related ministers.

Hong said that the loans will be offered after the government sets up a one trillion-won fund that will allow banks to buy the debt of subcontractors. 

The minister said the move will help provide liquidity for subcontractors, which have been struggling to get bank loans because of their low credit ratings. 

In addition, the government plans to seek fresh financial support of more than two trillion won for subcontractors of automakers with low credit ratings.