Korea Technology Finance Corporation (KOTEC) is joining hands with IBK to establish a comprehensive support system to rev up technology innovation ecosystems.
KOTEC announced on Mar. 29 that it signed a financial support agreement on the creation and revitalization of SME technology innovation ecosystems with IBK, at the bank’s headquarters in Jung-gu, Seoul.
The agreement was pursued in accordance with an agreement to operate a consultative group to revitalize policy finance signed by the two organizations in 2023.
It is designed to support continuous R&D and scale-up in consideration of SMEs’ growth stages and business environments.
KOTEC will support a total of 700 billion won worth of contract guarantees by categorizing SMEs’ growth stages into early, mid, and mature stages with the help of IBK’s funds for special contributions and guarantee fees.
Specifically, the program will support a total of 100 billion won in guarantees for companies in need of R&D expenses (0.5 percentage points for 3 years), a high premium rate (0.7 percentage points for 3 years) and payment of guarantee fees (0.7 percentage points for 3 years) for companies with excellent technology and an increase in the guarantee rate (85 percent to 100 percent) and a high premium rate (0.7 percent) for companies selected as future unicorns.
In April 2023, KOTEC formed a policy finance revitalization council with IBK to jointly identify areas for policy finance support for SMEs.
Since then, it has been actively responding to government policies such as long-term, low-interest loans and SME-tailored support and implementing guarantees to normalize the management of slumping SMEs.
“As business environments for SMEs are tough due to high interest rates and inflation, policy finance is becoming increasingly important to ease the burden of financial costs and facilitate smooth financing,” said Kim Jong-ho, CEO of KOTEC.
“KOTEC will expand support for excellent technology-powered companies to boost their technological competitiveness and help them grow into global unicorn companies through collaboration with related organizations.”
Partnering with Cheonan to Foster Local Technology-Based Startups
KOTEC and the Cheonan city government announced on Oct. 31 that they signed a business agreement for financial support to foster technology startups in Cheonan City at Cheonan City Hall on Oct. 30.
The agreement is designed to support the innovative growth of technology startups in Cheonan City by establishing a close collaboration system between the two organizations, thereby spreading local policy finance and contributing to the realization of a dynamic economy.
Under the agreement, KOTEC will provide a total of 5.4 billion won in special contribution agreement guarantees using 300 million won from Cheonan City’s special contributions.
It will reduce the burden of financing costs for local technology startups and drive innovation-powered growth by applying preferential measures such as increasing the guarantee ratio (from 85 percent to 100 percent for 3 years) and lowering the guarantee fee (a cut of up to 0.2 percentage points for 3 years).
Eligible companies are young technology startups which stayed in Cheonan for more than one year. They can receive working capital of up to 500 million won.
Moreover, KOTEC will consider up to KRW 1 billion through separate recommendations for companies selected as C-STAR companies which are Cheonan’s future unicorn companies.
Career Experience Program through Public-Private Collaboration
On Oct. 30, KOTEC conducted a career experience program for students in the Busan area in collaboration with the Busan National Science Museum, Busan’s Nam-gu Office, the Gamman General Welfare Center and Mara Nanotech.
The program, part of its social contributions in the educational sector, was designed to help local students understand SMEs’ role and importance, and broaden their career opportunities through on-site experiences.
By doing so, it contributed to the development of local talent and revitalizing educational donations.
Twenty-two elementary school students experienced future convergence science education using AI lecturers and science, technology, engineering, and math (STEM) education kits at Mara Nanotech.
After Mara Nanotech, they took part in a Busan Cinema Center Academy program where they shot videos with their original stories and experienced the filmmaking process, fostering their creativity and collaboration skills.
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