The Korea Credit Guarantee Fund (KODIT) has extended a helping hand to SMEs suffering in the wake of the economic downturn, caused by the spread of the Middle East Respiratory Syndrome (MERS) across the nation.
KODIT said on July 20 it has decided to double the cap on special guarantee support extended to SMEs suffering from the effects of the recent epidemic from 100 billion won to 200 billion won.
KODIT said the cumulative guarantee support for the SMEs amounted to 97 billion won as of July 15. The special guarantee support to SMEs suffering from the effects of the recent epidemic will be extended till the end of August.
“The accumulative special guarantee support for which SMEs have applied for one month since the system was inaugurated is on the rise, approaching the 100 billion won cap, and we’ve decided to raise the cap as KODIT picks up the responsibility of money supply,” a KODIT official said.
The special guarantee support for MERS-hit SMEs made its debut on June 16.
Most beneficiaries of the special guarantee support are general hospitals and clinics, businesses related to the tourism industry, youth educational and training centers, and performance establishments, KODIT said.
“KODIT officials have toured SMEs to lend an ear to the filed voices of SMEs, considered to be too sensitive to economic changes, to help smaller companies minimize the fallout from the effects of MERS,” said KODIT Chairman & CEO Seoh Geun-woo. “Working-level business officials are encouraged to do their utmost in doing so.”
KODIT Plans to Extend 25 Billion won in Investment Guaranties to Startup Beginners
KODIT provided 12.9 billion won in financial support to startup beginners in the form of an investment guarantee, a kind direct financial support system designed to take over shares or debentures of promising startups, in the first half of this year. KODIT said it plans to increase the financial support to 25 billion won during the whole of the year.
KODIT introduced the investment guarantee in May 2014. Beneficiaries of the investment guarantee have been selected among startups with technology competitive edge or growth potential with the development of new business models. They included the beneficiaries of the so-called First Penguin-type Startup Program, which made its debut last September. They also included startup beginners that had no track record of sales in the first half of the year. Startup beginners are to receive 22 billion won worth of investment guarantees from 11 private venture investment institutions.
A KODIT official said, “This year will see 25 billion won worth investment guarantees being extended, and we plan to explore and invest companies with high risks, being shunned by private investment institutions.”
About KODIT
Since its establishment in 1976, Korea Credit Guarantee Fund (KODIT) has continuously strived for the growth of SMEs and the national economy.
Over the years, KODIT has especially provided reliable support for the national economy during crises such as the Asian Economic Crisis in 1997 and global financial crisis in 2008.
The Korean economy is now in a period of another transition. The new paradigm of the Creative Economy will provide new growth initiatives to overcome the current recession and high unemployment rate.
SMEs with immense inspiration, innovative ideas, and full of challenges will be the driving force behind the Creative Economy. KODIT will consistently proceed with initiatives to increase SMEs’ competitiveness.
The main purpose of the credit guarantee services is to enable promising SMEs without enough collateral to obtain funds and make smooth headway in the financial or business transaction.
In an attempt to meet SMEs' demand for financing service, KODIT provides enterprises with credit guarantee services for the repayment of liabilities assumed by business enterprises in transactions with other companies or institutions.
By doing so, the credit guarantee services facilitate the financing of SMEs and stimulate the sound credit transaction through the efficient management of credit information.
Credit guarantee services involve a series of interactions among three parties: the guarantor (KODIT), the debtor (enterprises), and the creditor (financial institutions). If the debtor defaults, KODIT pays the guarantee obligation to financial institutions in place of the debtor.
General credit guarantee services can be classified into four categories according to the types of financing: indirect financing, direct financing, credit transactions between enterprises, and tax payment.
KODIT, Three-Time Winner of Korea Service Grand Prix
The Korea Credit Guarantee Fund (KODIT) received the Korea Service Grand Prix in the public financial category from the Korean Standards Association (KSA) for the third straight year at the Lotte Hotel in Seoul on July 9.
The Korea Service Grand Prize, sponsored by the Ministry of Trade, Industry and Energy and organized by KSA, is designed to spread quality management environment by exploring and awarding excellent companies and organizations, recognized for building client-oriented quality management systems and reaping remarkable achievements in carrying out overall management innovation practices.
KODIT’s winning the Korea Service Grand Prize for the third time in a row, is recognized outside for building its own quality management system and conducting service innovation activities.
The screening committee of the Korea Service Grand Prize selected as a best service innovation practice KODIT’s Creative Financial Center. KODIT inaugurated it to facilitate a corporate value evaluation system, which is essential in determining guarantees by evaluating the current and future growth potential of companies.
KODIT has become the first Korean financial institute to introduce the system.
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KODIT Headquarters in Daegu. (Photos:KODIT)
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