Minister Lee Young: "We Will Do Our Best to Prevent Budget Cuts to the Mother Fund... Related Measures to Be Announced Next Month"

[Asia Economy Reporter Kwak Min-jae] Lee Young, Minister of SMEs and Startups, expressed his intention to do his best to prevent the budget cut controversy for next year's Mother Fund.

On the afternoon of the 24th, at a meeting with reporters following the 20th Venture Summer Forum held at Paradise Hotel in Haeundae-gu, Busan, Minister Lee said, "Although the Mother Fund budget will not be at last year's level, we are trying to keep it from falling to even half of that." He explained, "Even if the Ministry of SMEs and Startups' opinion is not 100% reflected, it is necessary to sufficiently discuss potential issues in advance so that changes can occur in supplementary budget allocations."

According to the related industry on the 25th, next year's Mother Fund budget is being discussed at around 250 billion KRW, about half of this year's 520 billion KRW. While the exact figure will depend on the preliminary review of the Ministry of SMEs and Startups' budget proposal, it is already analyzed that a reduction compared to this year has been confirmed.

The Mother Fund is a policy fund aimed at revitalizing private venture investment. It operates by matching investments into venture funds (investment associations) established by venture capitalists (VCs). The Korea Venture Investment Corp., a specialized investment management institution, manages the Mother Fund. It plays a role as a catalyst for private venture investment by composing and investing in various types of sub-funds according to policy objectives.

Some analysts suggest that the government is placing more emphasis on budgets related to supporting small business owners. In fact, the Mother Fund budget has been steadily decreasing. It reached 1 trillion KRW in 2020, then 800 billion KRW in 2021, 520 billion KRW in 2022, and now around 250 billion KRW is being discussed for 2023.

In response, Minister Lee announced that he will unveil related measures next month to alleviate industry concerns about the reduction of the Mother Fund. He said, "Many are worried that as the situation becomes difficult and uncertain, the enthusiasm for investment will cool down, slowing the overall ecosystem's momentum," adding, "Taking such factors into account, we plan to announce measures in September."

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