Jungjingong Provides 200 Billion KRW Scale-Up Financing to Promising SMEs

Focused Support for Promising SMEs in Digital-Based New Industries, Key Industries, and Underserved Areas of Private Investment

Panorama of the Small and Medium Business Corporation

[Asia Economy Reporter Kim Cheol-hyun] The Small and Medium Business Corporation (Chairman Kim Hak-do, hereinafter referred to as SBC) announced on the 15th that it will provide scale-up financing worth 200 billion KRW to promising small and medium venture companies in digital-based industries, key industries, and areas underserved by private investment.

SBC supports promising small and medium enterprises to raise funds directly in the financial market through scale-up financing. By SBC purchasing corporate bonds issued by small and medium enterprises, it enhances their creditworthiness, enabling these companies to secure the necessary funds.

In particular, scale-up financing exhibits a higher 'multiplier effect' compared to general policy loans. Private investors participate as purchasers of securitized bonds, allowing the mobilization of funds approximately 3 to 4 times greater than the government’s financial input. In the first year of the project in 2019, SBC purchased 100 billion KRW in subordinated securities and raised a total of 353.6 billion KRW, supporting 114 small and medium venture companies.

The Ministry of SMEs and Startups and SBC are recruiting companies to participate in the scale-up financing project until the 22nd. The maximum issuance limit per company is 15 billion KRW, with an interest rate of around 3 to 5%. Chairman Kim Hak-do of SBC stated, "It is important to support the innovative growth of promising companies in future new industries to create sustainable new jobs," adding, "We will revive the growth potential of key industries such as automobile, aviation, and shipbuilding, which are temporarily facing liquidity crises due to COVID-19, and manufacturing sectors, thereby also protecting the stability of existing jobs."

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