Korea Technology Finance Corporation, Average Guarantee Accident Amount for Startup and Venture Companies Exceeds 610 Billion Won

88% of Accident Amounts Occur in 'Small Businesses'
Accident Amounts in Youth Startups Also Reach 100 Billion Won

The amount of claims on guarantees provided by the Korea Technology Finance Corporation to domestic startup and venture companies last year was confirmed to be 860 billion KRW. Over the past five years, the average amount of claims on guarantees has been recorded at over 610 billion KRW. Photo by iStock

[Asia Economy Reporter Kim Heeyoon] The amount of defaults on guarantees provided by the Korea Technology Finance Corporation (Kibo) to domestic startup and venture companies last year was confirmed to be 860 billion KRW. Over the past five years, the average amount of guarantee defaults has been recorded at over 610 billion KRW.

According to the 'Guarantee Fund Guarantee Status' received by Lee Seongman, a member of the National Assembly's Industry, Trade, Energy, Small and Medium Enterprises and Venture Businesses Committee from the Democratic Party of Korea, from Kibo, the default amounts for startup and venture companies supported by Kibo guarantees over the past three years were 636.6 billion KRW in 2018, 637.7 billion KRW in 2019, and 541.4 billion KRW in 2020, showing an average annual default amount of 613.4 billion KRW.

Over the past three years, Kibo's new guarantee amounts were 5.2465 trillion KRW in 2018, 4.848 trillion KRW in 2019, and 7.8208 trillion KRW in 2020, averaging approximately 5.97 trillion KRW annually. The guarantee default amounts were 992.1 billion KRW in 2018, 984.8 billion KRW in 2019, and 861.1 billion KRW in 2020.

Of the 861.1 billion KRW default amount last year, 88%, or 756 billion KRW, occurred in small enterprises. By industry, manufacturing accounted for 668.7 billion KRW (77.6%), services 138.4 billion KRW (16%), and others 31.8 billion KRW (3.6%).

The default amount for youth startup companies also reached 100 billion KRW. Since youth startup company defaults exceeded 100 billion KRW in 2019, last year saw defaults of 99.9 billion KRW. As of August this year, the default amount has already surpassed 51 billion KRW.

The recovery rate of subrogation claims over the past three years was also low, recorded at 7.2%, 6.5%, and 7.1% in 2018, 2019, and 2020, respectively.

Assemblyman Lee stated, "Guarantee support for small and medium enterprises, especially startup and venture companies, is essential for economic development, but management of guarantee default amounts must not be neglected," adding, "Kibo should systematically establish a guarantee default management system and consider ways to enhance repayment capacity through linkage with re-support projects."

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