Seeking Collaboration among
Credit Institutions beyond Asia
The 18th ACSIC Conference to be held Oct. 24-27 in Seoul

Some 130 people from 14 credit supplementation institutions from 10 Asian countries are gathering in Seoul to attend the 18th Conference of Asian Credit Supplementation Institution Confederation (ACSIC), to be held October 24-27.
Kim Gyu-bok, chairman & president of Korea Credit Guarantee Fund (KCGF) and concurrently chairman of the Organizing Committee of the 18th ACSIC Conference, said, "The upcoming Conference will address issues such as ways of facilitating support for small enterprises and collaboration among member institutions for boosting foreign direct investments, as well as their roles in achieving their common purpose ― economic growth in Asia." "ACSIC member institutions have made strenuous efforts to introduce both practical and immediately applicable credit supplementation systems not only through ACSIC conferences but also through the working-level program called ATP (ACSIC Training Program). They have managed to fulfill their duties of supporting small enterprises which are essential for the economic development by adopting the credit guarantee system to their own conditions," KCGF Chairman & President Kim said in an interview with NewsWorld. The following are the excerpts of the interview.
Question: What is the significance of KCGF? hosting the 18th ACSIC Conference?
Answer: About 130 people of 14 member institutions from 10 countries, including Korea, will get together in Seoul to participate in the 18th ACSIC Conference. The objective of the ACSIC Conference, established under the catchphrase 'Beyond Asia, Dynamic ACSIC' is to promote the sound development of the credit supplementation system for small business in the countries in Asia and mutual understanding among member institutions through information exchange and discussions. The 2005 ACSIC Conference will be held at the Seoul Grand Hyatt October 24 through 27 under the theme 'Globalization of Credit Guarantee System & Its Adaptation to Changing Financial Environment.'The chief delegates who are expected to participate in the ACSIC Conference are:
Kim Gyu-bok, chairman & president of KCGF, and Han Lee-hun, chairman & president of Korea Technology Credit Guarantee Fund (KOTEC), of Korea; Koichi Minaguchi, president of Japan Finance Corporation for Small and Medium Enterprises (JASME), and Teisaburo Seta, chairman & president of National Federation of Credit Guarantee Corporation (NFCGC), of Japan; and Huang Wei-sheng, chairman of Small & Medium Business Credit Guarantee Fund, of Taiwan; Yuth Vorachattarn, chairman of executive committee of Small Industry Credit Guarantee Corporation, of Thailand; Datuk Zamani Abdul Ghani, chairman of Credit Guarantee Corporation Malaysia Berhad, of Malaysia; Jati L. Mangunsong, president director of P.T. ASKRINDO, Baihaqi A. Lintang, president director of Perum Sarana, and Krisnaraga Syarfuan, president & CEO of PKPI, of Indonesia; Benel P. Lagua, president & COO of Small Business Guarantee and Finance Corporation, of the Philippines; M.A.R.C Cooray, assistant governor of Central Bank of Sri Lanka; Rajan S.Bhandari,
chairman of Deposit Insurance Credit Guarantee Corporation, of Nepal; and Brian Kiap Komun, managing director of Small Business Development Cooperation, of Papua New Guinea.
Q: What is the agenda of the 2005 ACSIC Conference?
A: ACSIC member institutions have made strenuous efforts to introduce both practical and immediately applicable credit supplementation systems not only through ACSIC conferences but also through the working-level program called ATP (ACSIC Training Program). They have managed to fulfill their duties of supporting small enterprises which are essential for the economic development by adopting the credit guarantee system to their own conditions. ACSIC conferences have made a solid contribution to the further development of credit guarantee systems and technological development of credit guarantee operation.
The 18th ACSIC Conference will address issues such as ways of facilitating support for small enterprises and collaboration among member institutions for boosting foreign direct investments, as well as their roles in achieving their common purpose ― economic growth in Asia.
Q: Would you elaborate on ACSIC's plan to expand collaboration with American and European credit supplementation institutions in accordance with the upcoming conference's catchphrase 'Beyond Asia, Dynamic ACSIC'
A: KCGF is seeking to promote business cooperation with European credit guarantee institutions such as AECM (Association Europeenne du Cautionnement Mutuel). Such collaboration efforts are likely to lead to the introduction of new products in the domestic credit supplementation industry through the benchmarking of credit guarantees, credit insurance techniques and the development of policy credit techniques.
KCGF's admission into the Pan-American Surety Association (PASA), the world's largest credit guarantee institution with a membership of 108 institutions from 36 countries, as a regular member is expected to allow KCGF to launch a full-fledged study into credit insurance and credit systems across the world, a move designed to help KCGF cope with the demand for market-friendly credit guarantee products.
Fideicomisos Instituidos en Relacion con la Agricultura (FIRA) of Mexico and Association of Caribbean States (ACS) were initially consulted on primary credit systems by KCGF in accordance with their request. KCGF plans to promote exchanges between the institutions on a continuous basis to offer consulting services on more specific subjects, including required laws, regulations and how to perform duties.
Q: Would you explain the projects KCGF has implemented as an opinion leader of ACSIC to provide technical support for the introduction of credit guarantee systems in Asian and other regions as well as future plans your institution is contemplating?
A: KCGF, together with Korea Fixed Income Research Institute, participated in an ADB-initiated project to set up a corporate credit information-sharing system for facilitating corporate credit in Cambodia. KCGF provided consulting on building up credit information management network on individual and corporate credit information among Cambodian commercial banks. KCGF expects this project to serve as the momentum for acquiring experiences for listing KCGF on ADB's roll of international consulting agencies and expanding its future business sectors with regard to transferring credit guarantee techniques.
Chengdu Small Enterprises Credit Guarantee Co. in Sichuan Prefecture and Shanxi Credit Guarantee Company for Small & Medium-sized Enterprises in Shanxi Prefecture, China, will visit KCGF within this year to hold detailed negotiations to receive consulting services on an overhaul of credit guarantee. These two institutions came to hear the successful operation of KCGF during the China Guaranty Forum, to which KCGF was invited as one of the main speakers. KCGF's successful delivery of consulting services to the Chinese institutions would enhance its global profile. When the project proves to be successful, KCGF is looking forward to offering additional consulting services related to a risk management system buildup.
As part of its efforts to achieve qualitative and quantitative growth of ACSIC, KCGF is seeking to approve the application of Credit Guarantee Fund Trust for Small Industries (CGTSI) in India and Korean Federation of Credit Guarantee Foundations (KFCGF) in Korea to become new members of ACSIC during the upcoming ACSIC Conference.
Q: What steps are taken among ACSIC member institutions to collaborate for revitalizing the Asian bond market?
A: Such tasks as the development of the Asian bond market and the establishment of credit supplementation institutions are primarily handled by funds established during ASEAN+3 policy discussions and ADB annual meetings.
Last December for the first time in Asia, Korea, together with Japan, issued 10 billion yen worth of P-CBO bonds, denominated in yen, on the basis of collateralized bonds issued by 46 Korean SMEs. The successful issue of P-CBO bonds was the first step taken in accordance with the Asian Bond market Initiative (ABMI), approved during the ASEAN+3 Finance Ministers'Meeting in August 2003 to prevent the recurrence of the Asian financial crisis in 1997-98 and secure a stable supply of funds for economic growth.
The greatest obstacle standing in the way of the Asian bond market, however, is the wide credit quality gap between bond issuers'credit ranking and investors. Close cooperation among credit supplementation institutions in the region rather than their separate effort is prerequisite to solve the problem.
The upcoming ACSIC Conference will discuss ways of strengthening overall credit capabilities through information exchanges, including policies of overhauling credit supplementation systems in each country and enhancing credit evaluation techniques to revitalize the bond market in the region.
Q: Would you explain innovative management schemes on organization, personnel and work KCGF has introduced under what is dubbed the ?econd Founding?as it is facing the next year's celebration of its 30th anniversary of its establishment and KCGF? business plans for the second half of the year?
A: Celebrating the 30th anniversary next year, KCGF Chairman & President Kim, who took office last July as the 16th chairman & president of KCGF, has declared the ?OPE-KCGF 2008 Vision,?an innovative management program designed to prepare for the next 30 years, based on its 30-year experiences and to achieve self-sufficient management.
In accordance with the HOPE-KCGF 2008 Vision, KCGF has pushed ahead with business, organization and personnel innovation measures. It aims to record surplus by 2008 to lay the groundwork for its second founding and to realize self-sufficient management in 2010 ― operating on its own funds and financial institutions?contributions without any support from the government.
Regarding its capital funds management plan for the second half of the year, KCGF plans to follow the government's guideline to provide 30 trillion won of guarantees during this year. During the first half year, KCGF provided 17,650.3 billion won of guarantees, accounting for 58.8 percent of the target amount, in keeping with the governments's policy to boost up the economy, so the room for further guarantee provision in the second half has been reduced. KCGF finds it difficult to secure the fund for new guarantees due to lower-than-expected rate of repayment of guarantees, caused by the sluggish business facing SMEs. However, KCGF will focus on efficient distribution of limited funds ― reducing outstanding guarantees for marginal companies and firms with large amounts of debts for long periods, while continuously expanding new guarantees at an optimal level to innovative SMEs, start-up companies along with promising and growing firms. nw

Kim Gyu-bok, chairman & president of Korea Credit Guarantee Fund (KCGF)

The participants of the 16th Conference of Asian Credit Supplementation Institution Confederation (ACSIC) held in Manila on Nov. 12, 2003.