Industrial Bank of Korea and Ministry of Justice Launch 'Special On-Lending for SME Value-Up Facility Funds'

Selected as 1000 National Representative Innovative Companies, Low-Interest Facility Funds Support for SMEs
Wide Support Through Nationwide Commercial Banks with a Total Operating Limit of 100 Billion KRW

[Asia Economy Reporter Song Hwajeong] The Korea Development Bank and the Ministry of Justice announced on the 2nd that they will support small and medium-sized enterprises (SMEs) by establishing a special financial product called 'SME Value-Up Facility Fund Special On-Lending' for SMEs selected as Innovation Enterprise National Representatives 1000 and SMEs operating in the materials, parts, and equipment sectors.

The Innovation Enterprise National Representatives 1000 is a program in which 10 government ministries (Ministry of Trade, Industry and Energy, Ministry of SMEs and Startups, Ministry of Science and ICT, Ministry of Health and Welfare, Ministry of Oceans and Fisheries, Ministry of Land, Infrastructure and Transport, Ministry of Culture, Sports and Tourism, Ministry of Environment, Korean Intellectual Property Office, Defense Acquisition Program Administration) discover 1,000 companies with high innovation performance and growth potential by industry over three years (2020?2022). The materials, parts, and equipment sector refers to the industries defined in Article 2 of the Enforcement Rules of the Special Measures Act to Strengthen the Competitiveness of the Materials, Parts, and Equipment Industry.

This special financial product is funded with a total of 100 billion KRW, consisting of 35 billion KRW attracted through the Ministry of Justice’s Public Interest Project Investment Immigration System and 65 billion KRW from the Korea Development Bank’s resources, and is intended to be used as facility funds for SMEs, such as factory construction. This fund will be provided at a preferential interest rate approximately 0.71 percentage points lower than the existing facility fund on-lending loan rate (a policy finance system in which the Korea Development Bank lends funds to banks or specialized credit finance companies to support SMEs and mid-sized companies, and intermediary financial institutions select target companies and execute loans through an indirect method).

The support targets are SMEs that meet the eligibility requirements for on-lending loans and are ▲ companies selected as Innovation Enterprise National Representatives 1000 ▲ companies in the materials, parts, and equipment industry with low credit ratings (corporate standard credit ratings of 9 to 11 (BBB- to B0)) ▲ companies established within the last 7 years ▲ companies that have increased jobs by 5% or more in the past year or companies benefiting from job creation tax support, i.e., job-creating companies.

Since this financial product is supported through loans via commercial banks by the Korea Development Bank, companies wishing to apply for loans can do so through the nearest bank branch.

Meanwhile, the Ministry of Justice introduced the 'Public Interest Project Investment Immigration System' in May 2013 to revitalize the economy through foreign investment attraction, achieving a cumulative foreign investment attraction of 309.1 billion KRW as of the end of 2021. The attracted investment funds have been supported to SMEs at interest rates lower than market rates through entrusted management by the Korea Development Bank.

Regarding the establishment of this special financial product, Park Beom-gye, Minister of Justice, said, "I am pleased that we can contribute to strengthening the competitiveness of domestic SMEs together with the Korea Development Bank using overseas capital attracted through the public interest project investment system implemented by the Ministry of Justice, and we will actively seek various support measures in the future."

Lee Dong-geol, Chairman of the Korea Development Bank, stated, "Through this new product launched in collaboration with the Ministry of Justice, we will promote the growth of innovative companies, lead generational change and industrial transformation, and continue to lead support for the future growth of SMEs."

Going forward, the Ministry of Justice and the Korea Development Bank plan to further activate the Public Interest Project Investment Immigration System and cooperate more closely so that the foreign investment funds attracted can help strengthen domestic industrial competitiveness and support the revitalization of the national economy.

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