Assemblyman Min Hyung-bae: "77% of Securities Firms' Investments Concentrated in the Capital Area"

[Asia Economy Honam Reporting Headquarters Reporter Yoon Jamin] It has been revealed that 77% of investments by the top 20 domestic securities firms in small and venture companies are concentrated in the Seoul metropolitan area. The concentration of headquarters and branches in the metropolitan area is pointed out to contribute to the economic gap between the metropolitan area and local regions due to disparities in financial infrastructure.

According to data on small and venture investment status from the top 20 securities firms by capital, submitted by the Financial Supervisory Service to National Assembly member Min Hyungbae (Democratic Party of Korea, Gwangju Gwangsan-gu Eul), as of the end of June, 1.433 trillion KRW, or 77.7%, of the 1.845 trillion KRW invested in small companies was concentrated in the metropolitan area. For venture companies, 1.638 trillion KRW (77.9%) out of a total investment of 2.103 trillion KRW was concentrated in the metropolitan area.

This trend has been worsening year by year. In 2015, 405 billion KRW, or 70%, of the total 577 billion KRW invested in small companies was concentrated in the metropolitan area, and 164 billion KRW, or 73.9%, of the 223 billion KRW invested in venture companies was invested in the metropolitan area.

Looking at the loan status for small and venture companies, as of the end of June, 1.815 trillion KRW, or 71%, of the total 2.558 trillion KRW in loans to small companies was concentrated in the metropolitan area. In contrast, investment in small and venture companies in Gwangju was only 3.1 billion KRW, accounting for 0.8% of the total, and Jeonnam had only 6 billion KRW, or 1.5%.

Not only in loan scale but also in financial infrastructure, the gap between the metropolitan area and local regions was significant. Among the top 20 securities firms, 19 had their headquarters in Seoul, and only one was located in Busan. Regarding branches, out of a total of 905 branches, 535 (59.1%) were located in the metropolitan area.

The problem is that this concentration of financial infrastructure and funding support in the metropolitan area contributes to deepening the wealth gap between the metropolitan area and local regions.

If small and venture companies leave local areas due to a lack of investment infrastructure and move to the metropolitan area, the investment gap between the metropolitan area and local regions will inevitably widen, which can cause similar disparities in the regional economy and jobs.

Also, since securities firm branches and professional personnel are concentrated in the metropolitan area, investors residing in local areas face relatively more difficulties in accessing investment-related information or subscribing to products.

Assemblyman Min said, “Even if people want to do business in local areas, the financial infrastructure gap makes it difficult to receive investment, forcing them to start businesses in the metropolitan area, creating a vicious cycle. We need to establish financial infrastructure in local areas to enhance regional industrial competitiveness, increase jobs, and create a virtuous cycle leading to balanced national development.”

This content was produced with the assistance of AI translation services.