Public Sector to Provide 494.2 Billion KRW in Social Finance to 2,366 Companies by October

Source: Financial Services Commission

[Asia Economy Reporter Kangwook Cho] As of October this year, a total of 494.2 billion KRW in public sector funds have been supplied as social finance to 2,366 social economy enterprises and others.

The Financial Services Commission announced on the 7th that it held the 3rd Social Finance Council meeting in writing and exceeded the annual target supply scale set for this year (427.5 billion KRW).

Social finance refers to financial services such as loans, investments, and guarantees provided to demanders who pursue social value over economic profit, such as social economy enterprises and cooperatives.

During this period, the social finance supply performance by sector was 135 billion KRW in loans (970 companies), 280.8 billion KRW in guarantees (1,300 companies), and 78.4 billion KRW in investments (96 companies).

The outstanding loan balance from banks to social economy enterprises as of the end of September was 1.0649 trillion KRW, an increase of 215.1 billion KRW (25.3%) compared to the end of last year (849.8 billion KRW). By company type, loans to social enterprises accounted for 834.1 billion KRW (78.3%), cooperatives 206.5 billion KRW (19.4%), village enterprises 20.7 billion KRW (2.0%), and self-support enterprises 3.6 billion KRW (0.3%).

By bank, KEB Hana Bank (283.2 billion KRW, 26.6%), Shinhan Bank (213.3 billion KRW, 20.0%), and NongHyup Bank (139.9 billion KRW, 13.1%) accounted for more than half of the total performance (636.4 billion KRW, 59.8%). Regional banks ranked Daegu (28.2 billion KRW, 2.6%), Busan (20.2 billion KRW, 1.9%), and Gyeongnam (19.9 billion KRW, 1.9%) in order.

Additionally, banks were found to have supported social economy enterprises through donations and sponsorships (14.06 billion KRW) and product purchases (2.26 billion KRW).

The Financial Services Commission plans to supply more than 516.2 billion KRW in funds from the public sector next year, an increase of over 20% compared to this year's target (427.5 billion KRW). Specifically, loans will increase by more than 40% from last year's target (121 billion KRW) to 170 billion KRW; guarantees will increase by about 9% from last year's target (230 billion KRW) to 250 billion KRW; and investments will increase by about 26% from last year's target (76.5 billion KRW) to 96.2 billion KRW.

Furthermore, the distribution of social economy enterprise evaluation techniques to public institutions and social finance intermediary organizations will expand from the current 14 companies to 50 companies next year. A systematic feedback system* will be established, including the formation of a network among operating institutions, to ensure objectivity and reliability.

The Korea Credit Guarantee Fund's special guarantee for social economy will also be restructured. By the first half of next year, guidelines for excellent companies will be prepared, and the special guarantee limit will be increased from the current 100 million to 300 million KRW to 500 million KRW. In addition, the guarantee limit for cooperative investment funds will be raised from 3 times to 5 times.

The Financial Services Commission stated, "To promote the activation of social finance, we plan to review the status of fund supply and discuss necessary institutional improvements with participating organizations in the council."

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