Financial Services Commission and Ministry of SMEs and Startups Hold the '3rd SME Financial Difficulty Inspection Council'

Review of Customized SME Financial Support Based on Financial Data
Proposal to Adjust SME Finance Focused on Facilities and Investment Funds in High-Growth Sectors
Ideas Include Developing Future Innovation Preferential Products and Enhancing Mobile Services for SOHO

The Financial Services Commission and the Ministry of SMEs and Startups discussed various issues to resolve financial difficulties faced by small and medium-sized enterprises (SMEs) and reviewed policy proposals such as customized financial support based on financial data.

On the 20th, the Financial Services Commission and the Ministry of SMEs and Startups held the "3rd SME Financial Difficulty Inspection Council" to discuss recent financial issues concerning SMEs. The council is convened regularly to proactively address difficulties by examining SMEs' financial conditions and risk factors and to actively cooperate in resolving necessary financial support tasks.

The meeting was co-chaired by the Director General of the Financial Policy Bureau of the Financial Services Commission and the Global Growth Policy Officer of the Ministry of SMEs and Startups. Participants included the Credit Information Center, the Korea Institute of Finance, the Korea Institute of Startup & Entrepreneurship Development, financial research institutes of the five major financial holding companies, and policy financial institutions.

Seokyung Ran, Director of the IBK Research Institute, presented on the "Establishment of a Big Data-Based SME Financial Policy Support System," emphasizing that "an infrastructure should be established to utilize big data related to SMEs from both public and private institutions so that policy support can be based on proactive data analysis, and financial demand forecasts by various industries and sizes of SMEs should be conducted."

Accordingly, opinions were raised that institutions such as the Credit Information Center should serve as a "Policy Finance Data Hub," concentrating information produced by SME policy institutions and sharing it with private financial companies and credit information companies (CBs), while developing analytical services to support financial industry policies and improve corporate finance efficiency. It was also suggested that policy finance projects supported by multiple institutions should be promoted to provide one-stop and efficient guidance to demanders.

Next, Seungbeom Seo, Director of the Credit Information Center, presented the agenda on "SME Financial Support Measures Considering Industry Characteristics." Through analysis of financial performance and financial usage characteristics by industry, it was proposed that financial support for SMEs should be shifted and adjusted from sectors with excessive competition and low growth contribution to sectors with high productivity and promising prospects. Data analysis showed that as of the end of September, about half of corporate SME loans were allocated to real estate, wholesale and retail, and construction industries, whereas sales growth rates were high in shipbuilding and automobile parts industries.

The financial research institutes of the five major financial holding companies shared their directions and ideas for SME financial support next year. To support the innovative growth of SMEs, a loan product development plan was proposed that offers preferential interest rates based on actual innovative items rather than the main industry classification code. Discussions also included enhancing mobile services for small office/home office (SOHO) clients who mainly transact via mobile banking (88.4%) rather than branches, improving the effectiveness of management support services for early-stage entrepreneurs and youth, and promoting non-financial services such as supply chain finance platforms to alleviate management difficulties of SMEs.

Regarding major policy issues, discussions on inter-agency collaboration were also held. The Small Enterprise and Market Service shared the on-site burden that banks must verify target debts with separate documents during refinancing loans, and the Credit Information Center agreed to concentrate loan information for the program to enable handling banks to process tasks promptly through cooperation.

Additionally, the Ministry of SMEs and Startups shared the issue of policy fund brokers illegally soliciting insurance subscriptions in exchange for policy fund consulting, and supervisory authorities including the Financial Services Commission agreed to raise awareness about the risks of illegal sales in the insurance industry and cooperate in prompt reporting and measures to prevent harm to innocent victims.

Jinchang Shin, Director of the Financial Services Commission, stated, "We will continue to hold this council regularly to inspect financial risks of SMEs, continuously share issues, and actively cooperate to provide financial support that helps the field."