Chairman Park Seong-taek of KBIZ.

An ad for the Yellow Umbrella Recoupment Program run by KBIZ successfully since its start in 2007 to help small biz firms and the people working for them.(Photos:KBIZ)

The Federation of SMEs (KBIZ) won the President of the Korea Economic Daily Award at the 2nd Korea Fund and Asset Management Awards on June 24 at Dasan Hall of the Korea Economic Daily in Seoul.

Chairman Park Seong-taek said he has been able to boost the profitability of KBIZ member firms to 4.21 percent despite low interest rates and will try to expand the base of profitable operations throughout the country so more SMEs could boost the profitability of their businesses.

He said KBIZ stressed effective and professional management while running the Yellow Umbrella Recoupment Program since 2007, a recoupment fund for small businesses and small business people.

Park said the Yellow Umbrella Recoupment Cooperative has placed asset management, risk management, customer satisfaction and accounting of funds under the head of the cooperative and run by a committee whose membership is made up of outside personnel, taking up more than half of the total members to introduce independence and objectivity in the committee’s decision making process. The cooperative also diversified its investment portfolio to include shares and replacement investments getting away from bonds, which used to be the center of its investment portfolio.

The cooperative also pays recoupment payments to members at once a year, which is higher than bank interest rates, as it includes welfare interest rates due to its members annually to help their livelihoods, Park said.

The small- and medium-sized businesses in the Republic of Korea are the root of the economy and account for 99 percent of the number of enterprises and 88 percent of all employees. It plays a pivotal role in the national economy.

Until now, Korean SMEs improved their competitiveness and cultivated overseas markets through endless technology development and management innovation. As a result, it has established a foundation to develop into the world’s ninth trading nation with trading volume of US$ 1 trillion.

The Kbiz was established in 1962 under the objective to improve the economic status and support equal opportunities for Korean SMEs. 

“We have actively dealt with the rapidly changing global economy through making proposals on governmental policies and seeking various systems, while also providing support so that SMEs can enhance competitiveness,” they said. “Also, we supported overseas marketing through participating in foreign exhibitions for SMEs, dispatching overseas business delegations, and providing information concerning FTA.” 

There are about 30 institutions from 17 countries that signed cooperation agreement with Kbiz, and they have worked aggressively to enter overseas markets for SMEs through various cooperation projects.