Small and medium-sized enterprises(SMEs) have expressed concern that the Bank of Korea's unprecedented rate hike of zero-point-five percentage points may have a significant effect on their survival.

The Korea Federation of SMEs issued a statement on Wednesday that warned of a possible major blow to the economy with the rate hike, explaining that the size of loans by small and medium enterprises stands at 931 trillion won, of which 437 trillion won is borrowed by individual businesses, which are at a higher risk of bankruptcy with the rising rate.

Noting that SMEs are typically offered loans at higher interest rates than larger firms, the group warned that the rates for small and medium-sized businesses may now rise even faster and called on the government to closely monitor the financial sector's funding situation and implement financial support policies to prevent excessive loan conditions put forth by commercial banks.

The agency also asked for measures in relation to COVID-19 loan support for businesses from the government, which is scheduled to end in September.