Shin Yong Bo Jeung Gi Geum Supports 54.9 Billion KRW Over One Year Through 'Small and Medium Enterprise Value-Up Program'

Workout Difficulties for Small and Medium Enterprises Included
Eliminating Blind Spots

[Asia Economy Reporter Ki Ha-young] The Korea Credit Guarantee Fund announced on the 8th that it has supplied a total of 54.9 billion KRW in guarantees over one year since the introduction of the 'SME Value-Up Program.'

The SME Value-Up Program is a program that provides guarantees and non-financial services to small and medium-sized enterprises (SMEs) with growth potential but experiencing temporary difficulties. It was implemented in June last year.

The support targets are manufacturing companies, innovative SMEs, and employment-creating companies using the Credit Guarantee Fund, with total credit between 1 billion KRW and 10 billion KRW, which have experienced operating losses for two consecutive years or an interest coverage ratio below 1 for two consecutive years, indicating temporarily weak financial conditions. In particular, SMEs with credit sizes below a certain level, which find it difficult to use corporate workouts, were included to eliminate blind spots.

Since the program's introduction, from June last year for one year, the Credit Guarantee Fund selected a total of 88 companies and supported them with 22.6 billion KRW in new guarantees, full maturity extensions of 32.3 billion KRW in existing guarantees, preferential guarantee fees, and management diagnosis consulting.

Additionally, in August last year, an agreement was signed with the Industrial Bank of Korea, and companies whose combined claims supported by the Credit Guarantee Fund and the Industrial Bank of Korea exceed 50% of total loans are provided with additional benefits such as new loans, interest rate reductions on existing loans (up to 2 percentage points), and full maturity extensions of existing loans.

A Credit Guarantee Fund official said, "Unlike the existing workout system, which mainly postpones bond enforcement, the Value-Up Program is a pre-rebound program that prevents insolvency and enhances competitiveness through new guarantees and debt restructuring," adding, "We will continue to strive to improve the system, including expanding partner banks so that more companies can use the Value-Up Program."

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