Soo-eun Expands Financial Support to 69 Trillion Won This Year... New Southern Policy Support Also Increases to 10 Billion USD

Visiting Kyu Bang, President of the Export-Import Bank, is giving a greeting at the agreement ceremony for the secondary battery industry promotion industry-finance cooperation program held on the 9th at LG Science Park in Magok, Gangseo-gu, Seoul. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Kangwook Cho] The Export-Import Bank of Korea (KEXIM) will increase its total credit support scale to 69.3 trillion KRW this year to boost economic vitality. This is an increase of 9.5 trillion KRW compared to last year's performance. In particular, support for the New Southern Policy will also increase to 10 billion USD to expand overseas orders.

On the 20th, KEXIM held a New Year's press briefing at the Bankers Club of the Korea Federation of Banks in Myeongdong, Seoul, attended by KEXIM President Bang Moon-kyu, where it announced the "2020 Major Business Promotion Plan" including these details.

This year, KEXIM plans to focus support on 68.6 trillion KRW, including 28.1 trillion KRW for small and medium-sized enterprises (SMEs) and mid-sized companies, 20 trillion KRW for materials, parts, and equipment, 12 trillion KRW for overseas infrastructure, and 8.5 trillion KRW for innovative growth. KEXIM explained that this is to accelerate the innovation engine of the economy and enhance global competitiveness by strengthening support for innovative growth, materials-parts-equipment, SMEs and mid-sized companies, and order industries.

Looking in detail at the key support areas, KEXIM will strengthen business development in core strategic countries under the New Southern and New Northern Policies to drive a rebound in overseas orders. The core strategic countries selected by KEXIM this year are 10 countries including Indonesia, Vietnam, India, Russia, Uzbekistan, and Myanmar. Among these, support for the New Southern Policy will increase from 8.6 billion USD last year to 10 billion USD this year. KEXIM plans to provide customized financial products utilizing export finance and Official Development Assistance (ODA), and introduce region-specific products such as local currency loans and guarantees, and medium- to long-term factoring.

Additionally, support for overseas infrastructure orders will increase by 41%, from 8.5 trillion KRW last year to 12 trillion KRW this year. KEXIM will strengthen support to secure high value-added investment and development-type projects for Korean companies, moving beyond simple contract-based project orders. It will also discover projects centered on new development industries such as smart cities, airports, and ports where Korean companies can participate, and provide project and financial advisory services.

To accelerate innovative growth, support for materials, parts, and equipment will increase from 19 trillion KRW last year to 20 trillion KRW this year. Support for key innovative industries such as secondary batteries, displays, semiconductors, 5G communication equipment, and eco-friendly ships will also expand from 6.9 trillion KRW last year to 7.5 trillion KRW this year. Furthermore, support for the three new industries?system semiconductors, bio-health, and future automobiles?will increase from 880 billion KRW to 1 trillion KRW.

To foster global SMEs and mid-sized companies, KEXIM will continue to expand the base of beneficiaries of policy finance. Funding supply will increase from 26.8 trillion KRW last year to 28.1 trillion KRW, and the number of client companies will expand from 4,555 to 5,200. By sector, support for the Hidden Champion nurturing program will increase from 7.4 trillion KRW to 8 trillion KRW. Customized financial support, up to 0.5%p interest rate reduction, and 100% recognition of export performance benefits will be strengthened for 234 target companies. Support for win-win finance programs will expand from 2.9 trillion KRW to 3.5 trillion KRW, and 200 billion KRW more will be allocated to securing core technologies, totaling 5.5 trillion KRW.

To achieve innovative economic cooperation results, the Economic Development Cooperation Fund (EDCF) will increase by 13%, from 1.0518 trillion KRW to 1.185 trillion KRW. Also, to build a comprehensive support base for inter-Korean economic cooperation, the main project budget of the Inter-Korean Cooperation Fund will increase from 1.1 trillion KRW to 1.2 trillion KRW.

Moreover, KEXIM plans to focus on completing the restructuring of shipbuilding companies such as Daewoo Shipbuilding & Marine Engineering (major national corporate merger notification completed), Sungdong Shipbuilding (pursuing rehabilitation procedure completion), and Daesun Shipbuilding (pursuing acquisition and merger).

President Bang said, "Despite uncertain conditions such as the US-China trade conflict and Japan's export regulations last year, we made our best efforts to support Korean companies' exports, but this year will not be easy either," adding, "With the mindset of 'Responding to change ahead of time and proactively pioneering new paths' (응변창신, Eungbyeon Changsin), we will create a new KEXIM that leads finance and industrial innovation."