Jungjingong, 900 Billion Won Poured into the 1st Scale-Up Finance of 2021

207 Companies Submitted 899.4 Billion KRW in 3 Weeks
Focused Support for Promising SMEs in Regional Key Industries and New Industry Innovation Growth Sectors

[Asia Economy Reporter Kim Cheol-hyun] The Ministry of SMEs and Startups (Minister Kwon Chil-seung, hereinafter referred to as the Ministry) and the Small and Medium Business Corporation (Chairman Kim Hak-do, hereinafter referred to as SBC) announced on the 28th that 207 companies applied for the first Scale-up Finance participation recruitment in 2021, submitting a total of 899.4 billion KRW, more than three times the planned issuance scale of 270 billion KRW.

Scale-up Finance is a project that supports small and medium enterprises (SMEs) that have difficulty issuing corporate bonds on their own credit to raise funds through the direct finance market. SMEs can raise the necessary funds by structuring the corporate bonds issued through Scale-up Finance into asset-backed securities and selling them to private investors and SBC. The Ministry and SBC plan to support Scale-up Finance for promising SMEs engaged in regional key industries and innovative growth sectors this year to lead the successful implementation of the Korean New Deal.

The SBC Screening Center conducts industry-specific evaluations for the first issuance participating companies. In addition, private specialized institutions such as credit rating agencies and accounting firms will conduct corporate bond credit rating evaluations and corporate value assessments to ensure objectivity in the evaluation. At the company selection stage, based on the evaluation results conducted by SBC and private specialized institutions, an investment committee composed of private experts in asset securitization and investment fields will conduct inclusion screening. Through this screening, support companies will be finally selected, and funding is expected to be provided around the end of June. KB Securities, Hi Investment & Securities, and Korea Investment & Securities were selected as joint lead managers for the Scale-up Finance issuance, and SBC will purchase subordinated bonds to enhance the credit of the asset-backed securities.

Last year, SBC selected 93 SMEs in digital-based new industries, key industries, and investment-excluded general manufacturing industries, supporting Scale-up Finance worth 350.6 billion KRW through an average corporate bond issuance of 3.7 billion KRW per company. Chairman Kim Hak-do said, "Scale-up Finance enables direct financial fundraising for SMEs that have difficulty issuing corporate bonds on their own and induces participation from private investors, generating a higher multiplier effect than government fiscal input. SBC will take the lead in supporting large-scale growth funds for regional innovative SMEs and lead balanced regional development and innovative growth in new industry sectors."

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