Financial Services Commission Holds Tech Evaluation Committee Meeting
Industrial Bank of Korea, Woori Bank, and Busan Bank Receive Positive Evaluations
Industrial Bank of Korea, Woori Bank, and Busan Bank received positive evaluations for their performance in technology finance supply in the second half of last year.
On May 8, the Financial Services Commission announced that it had held a Tech Evaluation Committee meeting at the Korea Federation of Banks in Jung-gu, Seoul, and approved the results of the technology finance tech evaluation for the second half of 2024.
Technology finance refers to a system in which financial institutions provide funding based on an assessment of a company's technology, rather than its financial status. This system was established to support innovative small and medium-sized enterprises and venture startups that lack sufficient financial resources.
The Financial Services Commission evaluates banks' technology finance supply performance every half-year to ensure stable supply and management of technology finance. This evaluation was the first to apply the 'Technology Finance Improvement Plan,' which introduced new indicators such as preferential interest rate metrics for technology finance and expanded indicators for credit loans.
According to the tech evaluation results for banks' technology finance performance, Industrial Bank of Korea ranked first and Woori Bank ranked second in the large league, receiving high marks in most indicators such as outstanding balances of technology credit loans and preferential interest rates. Both banks were recognized for systematically operating their technology finance systems and making efforts to introduce integrated credit models.
In the small league, Busan Bank ranked first and Kyongnam Bank ranked second, receiving high evaluations for intellectual property (IP)-backed loans and startup support indicators. While their operation of technology finance was somewhat lacking compared to the large league, they were assessed to be building their technology finance capabilities through infrastructure development and other efforts.
In the evaluation of the quality of technology credit assessment reports, eCredible and IM Bank (Daegu Bank) received an 'Excellent' grade. The Financial Services Commission explained that the quality of the reports has significantly improved due to the mandatory requirements for on-site investigations and detailed evaluation opinions.
Meanwhile, the outstanding balance of technology finance loans last year was 303 trillion won, a slight decrease compared to the 305 trillion won recorded in 2023. During the same period, the number of technology finance evaluations also declined from approximately 307,000 cases to 276,000 cases.
The Financial Services Commission stated that the decrease in technology finance supply performance and the number of evaluations was due to the exclusion of non-technology sectors and the prevention of lenient evaluations under the Technology Finance Improvement Plan. However, it emphasized that the average preferential interest rate for technology finance provided by banks was 0.32 percentage points, supporting technology companies at a rate 0.14 percentage points lower than general SME loans, thereby fulfilling the original purpose of technology finance.
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