Financial Services Commission Offers Preferential Export Bill Discount Rates to 'Export Strategic Item Companies' in Semiconductors and More

Kim Juhyun, Financial Services Commission Chairman, Visits Semiconductor Equipment Export Company
Implementing Overseas Buyer Financing to Promote Large-Scale Overseas Orders for Domestic Companies
Supporting Export Companies in Developing New Sales Channels

On the 2nd, Kim Ju-hyun, Chairman of the Financial Services Commission, visited Surplus Global, a semiconductor equipment export company located in Yongin, and then held a meeting to review the use of export finance with a delegation of representatives from 10 export companies at the Dongtan Knowledge Information Center. Chairman Kim stated, "We will strengthen financial support in three aspects to enhance the export competitiveness of our companies." The first is to "expand trade finance support so that export companies can smoothly conclude and execute export contracts."

The Financial Services Commission plans to consider preferential discount rates on export bills of exchange or extending the maturity period of import letters of credit, focusing on companies handling key export strategic items (semiconductors, secondary batteries, displays, electric vehicles, high value-added ships, machinery & robots, petrochemicals, steel).

To promote large-scale overseas orders for domestic companies, active financial supply to overseas buyers will also be implemented. In particular, for the shipbuilding industry, additional support measures including the activation of advance payment refund guarantees (RG) for shipbuilders will be announced soon. It is expected to be issued throughout the year exceeding $10 billion. An advance payment refund guarantee is an insurance product that guarantees the refund of advance payments made by the buyer to the shipbuilder if the shipbuilder fails to fulfill the shipbuilding contract. It is mainly issued by banks.

Secondly, support will be provided for export companies to pioneer new markets. The Financial Services Commission will seek additional improvements to foreign currency loan products and consulting programs currently provided by policy financial institutions to companies pursuing overseas projects, and plans to consult with commercial banks to enable them to offer similar services.

Thirdly, financial support for proactive facility investment and research and development by companies in preparation for future export market recovery will be expanded. To this end, the Financial Services Commission plans to concentrate the supply of export company-exclusive facilities and operating funds, currently operated by policy financial institutions, focusing on export strategic industries, and will consult with banks to allow commercial banks to operate export company-exclusive products.

Looking at the current status of major preferential products for export company facilities and operating funds from policy financial institutions, the Korea Credit Guarantee Fund offers export company-exclusive guarantee products with a supply target of 14 trillion won.

The Korea Development Bank supplies 2 trillion won worth of funds to strengthen export competitiveness. When lending for facilities and operating funds to companies with export performance, it offers an interest rate discount of up to 0.6 percentage points.

The Industrial Bank of Korea provides 700 billion won in loans to strong small and medium-sized enterprises. It offers working capital and new facility funds loans with a 1.0 percentage point interest rate preferential condition exclusively for companies with export performance of over $1 million (approximately 1.34 billion won).

At the meeting, representatives of small and medium-sized enterprises said, "Due to the recent high interest rates, it is very difficult to secure funds necessary for production and overseas investment of export companies," and expressed hope for an expansion of preferential loan products.

They also requested, "Export companies usually use export bill discounting or secured loan products from banks to recover export payments early, so please reduce the discount rates," and "Since it often takes a long time to collect accounts receivable arising from delivery transactions between companies, please provide low-interest liquidity support until the collection of receivables."

Related policy financial institutions were attended by Kang Seok-hoon, Chairman of the Korea Development Bank; Choi Won-mok, Chairman of the Korea Credit Guarantee Fund; Kim Sung-tae, President of the Industrial Bank of Korea; Jung Man-ki, Executive Vice Chairman of the Korea International Trade Association; and Kwon Woo-seok, Executive Director of the Export-Import Bank of Korea.

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