Jungjingong, 770 Billion Won Poured into the First Scale-Up Finance of the Year

155 Companies Registered... Focused Support for Promising Firms in New Industry Innovation Growth Sector

[Asia Economy Reporter Kim Cheol-hyun] The Ministry of SMEs and Startups (Minister Kwon Chil-seung) and the Small and Medium Business Corporation (Chairman Kim Hak-do, hereinafter referred to as SBC) announced on the 12th that 155 companies applied for the first round of Scale-up Finance participation this year, with a total application amount of 767.1 billion KRW, more than five times the planned issuance scale of 140 billion KRW.

Scale-up Finance is a project that supports small and medium enterprises (SMEs) with growth potential but difficulty in issuing corporate bonds on their own credit to raise funds through the direct financial market. SMEs can raise the necessary funds by structuring the corporate bonds issued through Scale-up Finance into asset-backed securities (P-CBO) and selling them to private investors and SBC. In particular, Scale-up Finance can raise more than three times the amount of government financial input by having private investors participate as purchasers of the asset-backed securities, thereby increasing the scale of financial support to SMEs.

To ensure objectivity in evaluation, the SBC Corporate Evaluation Center and private specialized institutions such as credit rating agencies, accounting firms, and venture capital (VC) firms participate together. They evaluate the applicant companies' growth potential, corporate bond credit ratings, and corporate value. At the company selection stage, based on the evaluation results conducted by SBC and private specialized institutions, a selection committee composed of private experts in asset securitization and investment fields conducts inclusion screening. Through this screening, support companies are finally selected, and funding is expected to be provided around the end of June.

SBC plans to focus on supporting promising SMEs in innovative growth sectors such as D.N.A (Data, Network, Artificial Intelligence), BIG3 (Semiconductors, Future Cars, Biohealth), and carbon neutrality this year. Through this, the goal is to enable companies to create sustainable jobs and play a leading role in the Fourth Industrial Revolution. Additionally, to contribute to social responsibility investment and the activation of the domestic ESG (Environmental, Social, Governance) market, Scale-up Finance will be issued as ESG bonds again this year, following last year.

Chairman Kim Hak-do stated, "Scale-up Finance will play an effective role in supporting direct financial fundraising for promising SMEs that have difficulty issuing corporate bonds," and added, "SBC will strive to support SMEs' direct financial fundraising so that SMEs are not excluded from the asset-backed securities market, which is centered on mid-sized and large companies."

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