To Support National Growth

KoFC to provide 9 tln won in loans and investments, especially to SMEs, green and new growth engines



President Ryu Jae-han of Korea Finance Corp.(KoFC).

Korea Finance Corp.(KoFC) plans to focus on securing the national growth motors by supplying funds selectively and expand its supply of funds to small and medium firms by actively coping with changes in global economic trends.
The state-run financial firm has allocated 9 trillion won this year and secure 16.925 trillion won in funds by issuing bonds and in loans from the international financial market.
The company plans to make 330 billion won in lending, which breaks down to 315 billion won to facility investment and 200 billion won in operating funds. The company also allocated 235 billion won to be invested in bonds and stocks including 160 billion won in bonds and the balance in stocks.
KoFC plans to secure 16.925 trillion won by issuing bonds and in loans at the international financial market. 14.752 trillion won in funds will go to repay debts and 529.8 billion won in funds in collected loans and investments. 152.9 billion won in funds brought forward.
The company plans to supply 3.3 trillion won in funds to SMEs through 16 financial institutions, an increase of two from previous years and narrow the risks associated with the loans. The company will also give support to firms with low credit ratings, especially, the SMEs located in the regions around the country.
The company is also set to provide 3.35 trillion won in direct loans to invest in facilities to the firms in such areas as green growth and new growth engines, and major industries that private financial institutions find hard to provide loans to such as facility investments and the technology development.
The company will also provide loans to help Korean firms to secure large overseas projects such as the nuclear power plant project in the United Arab Emirates and exploration of natural resources and often in cooperation with policy financial institutions.
KoFC also is ready to make direct investments in green and new growth engine industries to the tune of 2.35 trillion won. Investments will go to bonds of the firms in the green and new growth engine industries and sustainable growth areas. The company will increase its funds to push the growth of start-up firms and also create funds for start-up firms in local regions in order to invigorate the start-up firms operations.
President Ryu Jae-han said in his speech before the National Assembly National Policy Committee on April 15 that KoFC has supplied 8.190 trillion won in funds last year, up 690.8 billion won more than the allocation with the achievement ratio of 109.2 percent.
When you think that only 6 trillion won was initially allocated early, and considering that it was readjusted upward to 7.5 trillion won, it should taken as a very good result.
To break down the results by major business sectors, the company first gave priority to supporting SMEs by providing 3.7 trillion won in funds or 45.3 percent total funds to be provided in loans to business firms. In particular, the company successfully introduced the on-lending system to the extent that it provided 3.2 trillion won in loans by the new system.
On-lending loans have lower interest rates than the rates charged by nation-wide commercial banks on their loans and three -year maturities, which was why those loans were in much demand. On-lending loans were expanded to all SMEs from October last year to become a main financial tool to support SMEs.
KoFC also set aside 1.485,8 trillion won in investment funds for the support of SME start-up companies out of which 735 billion won was invested.
The CEO said the company has been at the forefront of supporting the green growth and new growth engine industries, which are the country's future growth bases by providing 4.5 trillion won or 55 percent of total funds in loans to those industries. The company set up 3.1 trillion won in funds for the support of new growth engine industries. The company for the first time in Korea set up the green industrial investment company capitalized at 50 billion won, which will provide “green financial support” under an overall green financial support plan to lead the green finance.
KoFC also had a deep interest in invigorating the expansion of social infrastructure and invigoration of regional development. The company gave support to the highway construction projects between Suwon and Kwangmyung in Gyeonggi Province and double electric rail line between Sosa and Won City in Gyeonggi Province, private funded projects which have been delayed so that the projects will be completed without a hitch. nw

Photos on courtesy of KoFC.