Next Year Policy Finance Supply of 205 Trillion Won... 81 Trillion Won Invested in New Growth Areas Including Semiconductors

81 Trillion Focused on Strategic Tasks Including New Growth 4.0
Financial Services Commission, '2023 Policy Finance Fund Supply Agreement'

[Asia Economy Reporter Yu Je-hoon] Policy financial institutions under the jurisdiction of the Financial Services Commission (Korea Development Bank, Industrial Bank of Korea, Korea Credit Guarantee Fund) plan to supply a total of 205 trillion won in funds next year, including 81 trillion won for five major priority tasks such as the New Growth 4.0 strategy.

On the morning of the 26th, the Financial Services Commission signed a 2023 policy finance fund supply agreement with the relevant policy institutions and government ministries at the Bankers’ Hall in Jung-gu, Seoul, and announced the direction of fund supply based on this agreement. This agreement and fund supply direction were prepared based on consultations through the 'Policy Finance Support Council.'

At the signing ceremony, Kim Ju-hyun, Chairman of the Financial Services Commission, stated, "Although policy financial institutions have independently played roles such as fostering new industries, complementing market failures, and stabilizing the market during crises, there were limitations in reflecting the necessary strategic tasks from a national perspective. Therefore, we formed the Policy Finance Support Council and, after several practical discussions, established a policy finance fund supply direction that reflects the core industrial policies promoted by each ministry."

According to the fund supply direction announced by the Financial Services Commission for next year, policy financial institutions under its jurisdiction plan to supply 205 trillion won, an increase of 5.7% (about 11 trillion won) compared to this year, considering the difficult domestic and international economic conditions. This increase rate is about twice as high as the past supply target increase rate (2-3%). By institution, the Korea Development Bank aims to supply 73.5 trillion won, the Industrial Bank of Korea 71 trillion won, and the Korea Credit Guarantee Fund 60.5 trillion won.

First, reflecting the New Growth 4.0 strategy and ministry-specific industrial policies, five strategic tasks supported by policy finance were selected, and 81 trillion won, which is 40% of the annual supply target, will be intensively supplied. Specifically, these are ▲ fostering global super-gap industries (such as semiconductors and other key industries) with 15.6 trillion won ▲ supporting future promising industries with 13.1 trillion won ▲ restructuring existing industries and advancing industrial structures with 17.3 trillion won ▲ nurturing unicorn ventures and small and medium-sized enterprises with 9 trillion won ▲ resolving corporate management difficulties due to worsening external conditions with 26.4 trillion won.

The financial authorities plan to supply a total of 22 trillion won to core projects proposed by each government ministry through the Policy Finance Support Council, and enhance support effects by offering preferential interest rates and guarantee fees compared to general fund supply. Strategic preferential loan products independently launched by each institution, such as facility investment boom-up loans (Korea Development Bank), innovation growth vision loans (Industrial Bank of Korea), and new growth engine guarantees (Korea Credit Guarantee Fund), will be intensively supplied to the five priority areas. Additionally, based on funds raised by the government or private industry, policy finance will provide 'customized preferential financing' matched to the fields desired by ministries or industries.

A Financial Services Commission official said, "The Policy Finance Support Council will be held regularly next year to periodically check the fund supply performance by industrial sector and supplement any insufficient demand as needed. Furthermore, if new issues or industrial policy tasks arise, they will be additionally reflected in each institution’s fund supply plan."

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