[Export Big 5 Leap] Public-Private TF 'One Team Korea' All-Out Effort... Significant Expansion of Export Financing

Customized for Small and Medium Enterprises
Guarantee Fee Discounts and Low Interest Rates
Trade Insurance Also Supported at Record High Levels

The government is making an all-out effort to achieve $700 billion in exports through 'One Team Korea,' an export support task force (TF) jointly formed by the public and private sectors. To accelerate the export boom, it is expanding export financing and trade insurance support, while also easing regulations and providing focused support for early-stage export companies.

According to related ministries on the 21st, Minister of Trade, Industry and Energy An Deok-geun has been taking a hands-on approach by visiting export sites, starting with Pyeongtaek Port in January this year, followed by visits to semiconductor and secondary battery production facilities. Based on this, the Ministry of Trade, Industry and Energy recently finalized and announced a 'Supplementary Export Support Plan' in cooperation with multiple ministries.

Minister Andeok Geun of the Ministry of Trade, Industry and Energy (left) visited the Kia Motors exclusive pier at Pyeongtaek Port, his first export site since taking office on January 5th this year, to inspect the export site.

To alleviate the burden on companies caused by changes in finance, support systems, and trade environments, the scale of export financing by policy financial institutions will be expanded by 5 trillion won this year to supply a total of 365 trillion won. Additionally, export preferential products of the five major commercial banks will be expanded by 2 trillion won, providing a total of 7 trillion won in additional export financing support through public-private cooperation. Furthermore, to ease the burden on companies regarding key imported raw materials and items, the tariff rates on naphtha, LPG (liquefied petroleum gas), and crude oil used for manufacturing naphtha and LPG will be set to 0% until the end of the year. In addition, small business owners will receive a 50% reduction in fees for using KOTRA's overseas market research services until the end of the year, and the criteria for recognizing domestic animation will be relaxed to support overseas expansion of content through the activation of overseas co-productions.

In particular, the Korea Trade Insurance Corporation (K-sure), which is responsible for the core tasks of export financing, is continuously increasing the scale of trade insurance to contribute to achieving the largest-ever export target. It is contributing to export expansion through trade insurance specialized for large orders as well as small and medium-sized enterprises (SMEs) and mid-sized companies. A K-sure official said, "Last year, through the expansion of support for large orders and strengthening of special support for new industries, we achieved a record high performance of 244.8 trillion won, exceeding the trade insurance support target of 220 trillion won," adding, "This year, we also plan to support the maximum supply target of 255 trillion won."

Last year, K-sure supported 86.7 trillion won, accounting for more than 35% of the total trade insurance support, to SMEs and mid-sized companies struggling with export sluggishness. For example, textile processing company A, located in Seoul, experienced a sharp deterioration in financial performance due to decreased sales caused by the COVID-19 pandemic. Last year, both export performance and sales further declined, making it even more difficult to secure funds necessary for exports. Company A visited a bank for a loan but was unable to obtain one due to its financial history. While seeking solutions, Company A consulted K-sure about export difficulties. Through this, they were informed about the newly established 'Export Package Guarantee' product, which supports SMEs facing liquidity difficulties to procure funds necessary for exports at low costs. Company A's existing trade insurance loan limit was 500 million won, but after consultation, it was increased to 3 billion won through the export package guarantee. Based on this, they successfully secured funds smoothly and prepared the 'ammunition' needed for exports. This year, Company A expects both sales and export performance to increase.

Trade Insurance Corporation Headquarters

This year, the support scale for mid-sized and small companies will be expanded to a maximum of 90 trillion won. This is also the largest scale ever for both last year and this year. Specifically, to resolve liquidity difficulties of SMEs and mid-sized companies, the export package guarantee is being implemented in collaboration with private financial institutions to provide preferential financing at low interest rates. When commercial banks such as Hana, Woori, Shinhan, Kookmin, and NongHyup contribute funds to K-sure, K-sure provides companies with up to a 20% discount on guarantee fees and preferential benefits of up to twice the limit, while banks offer preferential interest rates to companies. Through approximately 130 billion won in funds contributed by the five major commercial banks to K-sure, about 2 trillion won in preferential financing will be provided to SMEs and mid-sized companies over the next five years.

In the second half of the year, the 'Export Planet' program, which supports the leap of SMEs and mid-sized companies to global enterprises, will also begin. This program discovers SMEs and mid-sized companies with growth will and export potential and nurtures them into global excellent export companies through customized support according to growth stages. K-sure plans to select about 40 companies this month and provide support such as special limits (up to 10 billion won) and insurance premium discounts (up to 90%).

Jang Young-jin, president of K-sure, said, "Listening to the difficulties our companies face on the front lines of exports and preparing customized support measures is K-sure's role as a policy financial institution," adding, "We will continue to ease the financial burden on SMEs and mid-sized companies and actively support new policy financial demands arising from changes in trade structures to firmly establish the momentum for export growth."

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