Gov’t offers $360 mil. in credit guarantees to propel SME growth

Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok speaks during a meeting of economy-related ministers at Goverment Complex Seoul, Monday. Yonhap

Up to 500 billion won ($363.3 million) in credit guarantees will be made available by the government for promising small- and medium-sized enterprises (SMEs) involved in strategic technologies related to materials, parts, and equipment. The Ministry of Economy and Finance revealed on Monday that tailored support will be extended to these enterprises, aiming to facilitate their growth and enhance their contribution to Korea’s sustained economic development.

With this objective in mind, the government plans to identify 100 highly competitive SMEs and will closely oversee their progress over the next three years.

Each company will be paired with a management consultant who will provide personalized guidance on developing new growth engines, leveraging innovative technologies, expanding into international markets, and exploring various avenues to expand their business operations.

The targeted SMEs will receive additional benefits, including upfront bonus points, when competing for government-backed projects in areas such as exports and financing.

“We’re dedicated to maximizing the country’s economic potential by prioritizing the rapid advancement of SMEs up the corporate ladder,” Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok said as he announced the strategy during a meeting of economy-related ministers in Seoul, Monday.

Roughly translated as “Jump up! Corporate growth ladder,” the scale-up strategy is the first of its kind introduced by the Yoon Suk Yeol administration.

This strategy addresses the challenges faced by SMEs, which often encounter obstacles hindering their growth. Despite comprising 99 percent of all businesses in the country, SMEs struggle, with their employees constituting 81 percent of all salaried workers nationwide.

In some cases, SMEs choose not to expand further to avoid losing certain benefits, such as tax incentives, in extreme circumstances.

“The scale-up strategy acknowledges the longstanding challenges faced by SMEs and is crafted to incentivize them to make significant strides toward reaching a higher level of growth and development,” Choi said.

Other support measures include simplifying the process for SMEs to access loans from commercial banks and providing them with credit guarantees backed by the government.

For example, the government plans to facilitate connections between SMEs possessing technological and innovative capabilities and commercial banks. This initiative aims to enable these SMEs to secure loans at more favorable interest rates than typically available.

Operating under the auspices of the government, Korea SMEs and Startups Agency and Industrial Bank of Korea are contacting commercial lenders to materialize the loan support program.

For companies seeking assistance in expanding overseas, four government-affiliated entities — the Korea SMEs and Startups Agency, the Export-Import Bank 추천 of Korea, the Korea Trade Insurance Corporation, and the Korea Technology Finance Corporation — will provide financial support through collaborative consultations.

You may also like

Leave a Reply

Your email address will not be published. Required fields are marked *