FSC to Supply 122 Trillion Won in Policy Finance to Industrial Sites by April
Efforts to Overcome Economic Slump Through Early Execution of Policy Finance
To revive the sluggish economy, the Financial Services Commission (FSC) announced that it is supplying more policy finance funds to industrial sites faster than last year. By executing policy finance worth up to 122 trillion won, expanded by up to 13 trillion won compared to last year by April, the FSC plans to swiftly disburse 60% of the total funds in the first half of the year to aid economic recovery.
122 Trillion Won in Policy Finance to be Supplied to Industrial Sites by April
On the morning of the 19th, Kim So-young, Vice Chairman of the FSC, held a meeting at the Government Seoul Office with five major policy finance institutions ? Korea Development Bank, IBK Industrial Bank, Export-Import Bank of Korea, Korea Credit Guarantee Fund, and Korea Technology Finance Corporation ? to review the early execution of policy finance. She stated, "We will support the revitalization of industrial sites through early execution of policy finance in the first half of the year."
Vice Chairman Kim explained, "The five major policy finance institutions have supplied a total of 33 trillion won by the 14th, which is 17% (4.9 trillion won) more than the same period last year. Considering the increased domestic and international uncertainties and the extended Lunar New Year holidays, this is a very rapid execution pace."
She cited the Export-Import Bank, which is disbursing over 2 trillion won at a fast pace, and the Korea Credit Guarantee Fund, which is expanding support for export companies in response to difficult export conditions, as exemplary cases.
Vice Chairman Kim announced, "The five policy finance institutions will supply 88 trillion won in the first quarter and more than 122 trillion won, expanded by over 13 trillion won compared to usual levels, to industrial sites by the end of April. Through this, we will achieve more than 60% of the policy finance institutions' supply plan within the first half of the year." The 122 trillion won figure reflects an additional 3 trillion won increase from the amount announced at the FSC's early-year 'Major Issue Solution Meeting,' incorporating the Export-Import Bank's target.
She added, "From March, as companies' financial statements are sequentially finalized and full-scale facility investments begin, the FSC will support to ensure that industrial sites are filled with vitality. We ask related agencies to actively cooperate."
Speed of Innovation Growth Fund Capital Supply to Accelerate
The formation timing of policy funds for equity investment is also accelerating. The 'Innovation Growth Fund,' a fund aimed at fostering and scaling up innovative industries with an annual size of 3 trillion won entering its third year this year, announced its formation plan early in December last year, right after the budget was finalized. On the 10th, the master fund management company selection was completed. This is about two months earlier compared to March 31 of the year before last and April 5 of last year, and it is expected that the speed at which funds are actually supplied to industrial sites will also increase.
Vice Chairman Kim expressed, "Since the fund formation is progressing two months faster than usual, the speed at which funds are supplied to industrial sites through equity investments and other methods will also accelerate."
She emphasized, "With low growth solidified in the 2% range and the real growth rate forecast for this year downgraded to the 1% range, the economic outlook is not bright. If the recovery speed of the real economy slows down, the difficulties faced by companies in the industrial ecosystem will inevitably increase, so policy finance must play an active role."
Meanwhile, before the government's capital increase for the Korea Development Bank is actually executed, the bank launched a 'Special Program for Semiconductor Facility Investment Support' worth 4.25 trillion won starting January 24. Companies operating in the semiconductor industry that intend to invest in facilities can borrow funds through the Korea Development Bank at interest rates around 2%, comparable to government bond rates. The FSC also stated that companies that used the program provided earlier in July last year with the bank's own capacity can refinance (change funding sources) through the newly created program.
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