Over 1 Trillion Won Poured into 2023 1st Scale-Up Finance by Jungjingong

193 Companies Apply for 1.098 Trillion Won

The Small and Medium Business Corporation (Chairman Kim Hak-do, hereinafter referred to as SBC) announced on the 9th that 193 companies applied for the first round of Scale-up Finance participation in 2023, with a total of 1.098 trillion KRW received, which is more than eight times the planned issuance scale of 130 billion KRW.

Scale-up Finance is a project that supports small and medium-sized enterprises (SMEs) that have difficulty issuing corporate bonds on their own credit to raise funds through the direct finance 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. It also has the effect of inducing the scale-up of SMEs by supplying large-scale funds compared to general policy funds.

This year, SBC plans to support stable growth funds for SMEs by issuing P-CBO with a 5-year maturity for the first time in Korea. By supporting the scale-up of excellent SMEs in innovative growth sectors and ultra-gap and new industry sectors, SBC plans to foster core strategic industries and focus on expanding new growth engines.

In the future, private venture capital firms will conduct industry-specific reviews for the first-round participating companies, and private specialized institutions such as credit rating agencies and accounting firms will conduct due diligence and evaluations to ensure objectivity. Final selection of supported companies will be made through the review, and funding is expected to be provided by the end of June. The joint lead managers for the issuance of Scale-up Finance are IBK Investment & Securities, Korea Investment & Securities, and Hana Securities, and NH Nonghyup Bank will newly participate to provide credit enhancement for asset-backed securities in addition to the existing KDB Industrial Bank.

Last year, SBC selected 91 SMEs through the Scale-up Finance project. By acquiring subordinated securities to enhance the credit of asset-backed securities, SBC supported the issuance of corporate bonds worth an average of about 2.1 billion KRW per company, totaling 188.2 billion KRW. Chairman Kim Hak-do said, "Scale-up Finance enables SMEs that have difficulty issuing corporate bonds on their own to raise funds through direct finance and induces participation from private investors, resulting in a higher fiscal multiplier effect compared to other projects that rely solely on government funds. SBC will take the lead in providing large-scale growth funds to small and medium ventures and contribute to creating new growth engines."

Jungjingong Scale-up Finance Issuance Structure

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