Shinbo to Provide 90 Trillion Won in Guarantees This Year... Support for SMEs and Small Business Owners

Choi Wonmok, Chairman of Shinbo, Holds New Year Press Conference on the 12th

**Embargo until 11:30 AM.

[Asia Economy Reporter Yu Je-hoon] The Korea Credit Guarantee Fund (KODIT) has decided to provide approximately KRW 90 trillion in guarantees this year. In addition, it plans to continue operating support programs for small business owners affected by the COVID-19 pandemic, while also establishing new guarantee projects to help companies overcome the triple crisis of high interest rates, high exchange rates, and high inflation.

On the morning of the 12th, Choi Won-mok, Chairman of KODIT, held a New Year press conference at the Bankers’ Hall in Jung-gu, Seoul, where he revealed the management performance for 2022 along with key plans for the new year. The total guarantee volume planned by KODIT for this year was set at KRW 89.7 trillion, an increase of KRW 9.4 trillion compared to the previous year, to respond to the complex crisis and support recovery from COVID-19 damage. Specifically, this includes KRW 61.5 trillion in general guarantees, KRW 15.1 trillion in securitization company guarantees, KRW 7.4 trillion in low-interest refinancing guarantees, and KRW 5.7 trillion in entrusted guarantees for small business owners.

In particular, KODIT plans to supply KRW 53 trillion to priority sectors essential for the national economy, such as startups (KRW 19 trillion), exports (KRW 14 trillion), core industries (KRW 4 trillion), new growth engine industries (KRW 10 trillion), and job activation (KRW 6 trillion), thereby strengthening the economic foundation and enhancing economic vitality.

KODIT also plans to invest KRW 7.6 trillion this year to continue operating customized financial support programs for small business owners affected by COVID-19. The scope of the Small Business Success Dream Consulting program will be expanded to include companies using low-interest refinancing guarantees, and in March, a new “E-commerce Business Guarantee (tentative name)” will be launched to support the creation of an innovative ecosystem in the rapidly growing e-commerce market.

Regarding the response to the triple crisis, new guarantee programs will be established, including ▲special guarantees for companies affected by global supply chain disruptions and ▲agreement guarantees to reduce financial costs for SMEs during periods of rising interest rates. The special guarantee for supply chain-affected companies is expected to provide support worth KRW 1.3 trillion over two years, while the financial cost reduction agreement guarantee, operated through agreements between KODIT and financial institutions, will be piloted with KRW 200 billion in cooperation with Industrial Bank of Korea and expanded to other banks depending on the results.

Measures to stabilize the bond market will also be promoted. First, a new primary collateralized bond obligation (P-CBO) program called the “Bond Market Stabilization Company Guarantee” will be introduced. Through this program, KODIT plans to supply KRW 2.5 trillion to financially vulnerable sectors such as mid-sized companies and construction firms. Additionally, KODIT plans to promote overseas issuance of P-CBOs to diversify investment destinations and reduce interest burdens for guarantee users.

Support capabilities for startups will also be expanded. KODIT will operate a new guarantee supply target for startups at around KRW 550 billion this year, an increase of KRW 40 billion compared to the previous year. Furthermore, the “Scale-up 200 Project” to foster unicorn companies in new industries will be launched in earnest. Through the KODIT-type unicorn fostering project, a total guarantee limit of KRW 1 trillion will be provided to supply venture capital and support private investment attraction and overseas expansion.

Meanwhile, to establish a mid- to long-term management strategy, KODIT will form a “Future Development Advisory Group” composed of experts from various fields. The advisory group will set directions for business innovation by linking future development tasks derived from opinion gathering and environmental analysis with government policy agendas.