5 Trillion 'Mid-sized Enterprise Exclusive Fund' Performance Within the Year... Additional 3 Trillion Raised for 'Innovation Growth Fund'

Kim So-young, Vice Chairman of the Financial Services Commission, is delivering opening remarks at the 6th Policy Finance Support Council held on the morning of the 6th at Front1 in Mapo-gu, Seoul, together with government ministries and policy financial institutions.

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The government is forming a 5 trillion won 'Mid-sized Enterprise Exclusive Fund' centered on the banking sector to support mid-sized companies' entry into new businesses and business expansion starting this year, and will additionally create a 3 trillion won 'Innovative Growth Fund' to invest in nurturing venture companies in the artificial intelligence (AI) sector.

On the 6th, Kim So-young, Vice Chairman of the Financial Services Commission, held the '6th Policy Finance Support Council' in Mapo, Seoul, and announced this plan. As a follow-up measure to the 'Customized Corporate Finance Support Plan' announced on the 15th of last month, the council was attended by related ministries such as the Ministry of Trade, Industry and Energy, Ministry of Environment, Ministry of Health and Welfare, and financial institutions including KDB Industrial Bank, IBK Industrial Bank, and Korea Credit Guarantee Fund.

In her opening remarks, Vice Chairman Kim said, "As the economy is difficult, please respond closely to the demands on the ground, such as increasing the fund execution targets of the Industrial Bank and the Industrial Bank of Korea as much as possible compared to the previous year in line with the historically highest level of early fiscal spending," and requested, "Please also launch early the corporate finance support programs of the five major banks included in the corporate finance support plan so that the support effects can be realized quickly."

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On this day, the council discussed the plan to establish the Mid-sized Enterprise Exclusive Fund. This fund is the first specialized fund for mid-sized companies created with capital from the banking sector, formed with a scale of 5 trillion won to be invested in mid-sized companies' entry into new businesses and business expansion. The government plans to initially raise 250 billion won as a mother fund through the five major banks: KB Kookmin Bank, Shinhan Bank, Woori Bank, Hana Bank, and NH Nonghyup Bank, and match private funds exceeding 50% of the mother fund's capital to create a 500 billion won sub-fund exclusively for mid-sized enterprises.

Vice Chairman Kim emphasized, "We must quickly discover the first investment case so that it can settle smoothly in the market," and urged, "Policy financial institutions should actively carry out support for mid-sized companies announced in the 'Customized Corporate Finance Support Plan.'

The council also discussed the plan to additionally raise 3 trillion won for the Innovative Growth Fund. The Innovative Growth Fund is a fund being raised over five years from 2023 to 2027 with a scale of 15 trillion won to enhance future growth engines and nurture innovative ventures. Although there were difficulties in the funding market due to high interest rates in 2023, a total of 3.15 trillion won was raised by the end of the year, exceeding the target amount of 3 trillion won. The Financial Services Commission plans to further promote investments in the recently spotlighted fields of climate technology and artificial intelligence (AI) this year.

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Additionally, the council discussed evaluation methods to assess the effectiveness of policy finance input. This year, the Korea Credit Information Services and the Korea Institute of Finance will collaborate to advance the effectiveness evaluation methodology, and analyze how policy finance such as loans, guarantees, and investment support have impacted companies' finances and employment in the industrial field. The analysis results will be used to optimize focused support areas and the allocation of policy funds more efficiently.

Opinions on climate finance were also gathered. Since climate finance requires long-term continuous support, the 'Future Response Finance Task Force (TF)' led by Vice Chairman Kim will cooperate with related ministries to discover support tasks. Vice Chairman Kim stated, "As several ministries including the Ministry of Environment, Ministry of Trade, Industry and Energy, and Ministry of Science and ICT mentioned the necessity of climate finance at the 5th council, we will announce support plans soon based on this."

Meanwhile, an official from the Ministry of Trade, Industry and Energy who attended the meeting said, "The Mid-sized Enterprise Support Fund is a program of great significance for the leap of mid-sized companies, and we will support sharing information on excellent mid-sized companies to enable investment in the future," and an official from the Ministry of Environment said, "To respond to the climate crisis and revitalize green investment, we will strengthen the government's role as a catalyst by supporting green bond issuance and establishing a green export fund."

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