The Unification Ministry plans to give soft loans to companies that have only lately started operations at the joint Korean Kaesong Industrial Complex. The ministry on Monday said it plans to loan a total of W6 billion (US$1=W1,154) in operating funds from the Inter-Korean Cooperation Fund to 20 latecomer companies that started at the Kaesong complex since the second half of last year, when inter-Korean relations deteriorated.

Each such company stands to get W100-500 million at 3-4 percent interest.

A ministry official said the companies "suffered greater difficulties than firms already operating there or than the small and medium-sized enterprises operating in South Korea due to travel restrictions imposed by North Korea after they began operations there amid a shortage of North Korean workers."

Twenty-eight firms at the industrial park received loans worth W76 billion from the Inter-Korean Cooperation Fund in September last year. The government decided to allow firms whose sales have dropped significantly recently to delay repayment of principal and interest for six months.

A government source said the administration "needs to show its intent to develop the Kaesong industrial park at a time when the North is taking greater interest in the inter-Korean economic cooperation."