Yoon Dae-hee, chairman of the Korea Credit Guarantee Fund (fifth from left) poses for a commemorative photo with other attendees including Naoyuki Yoshino (sixth from left), dean of the Asian Development Bank Institute in a conference held under the theme of “Investment in Startups and SME Finance” in Tokyo, Japan on Jan. 29 and 30. (Photo: KODIT)

Korea Credit Guarantee Fund (KODIT) and the Asian Development Bank Institute (ADBI) held a conference under the theme of “Investment in Startups and SME Finance” in Tokyo, Japan on Jan. 29 and 30.

KODIT aims to lead a balanced development of the economy by extending credit guarantees for the liabilities of promising small companies.

The ADBI is a think tank of the Asian Development Bank (ADB). It was established for research, human resource development and development experience in the in the Asia and Pacific region.

Since last year, KODIT had prepared the event with the ADBI, to promote investment in Asian startups and develop SME finance.

At the conference, about 50 academic and government experts from 14 countries including Korea, Japan, China, India, Vietnam, and Canada discussed ways of enhancing financial access to SMEs, activating startup investment and regulations and policy models and sought ways for development in the future.

During the conference, KODIT made presentations on the new roles of guarantee institutions for the 4th Industrial Revolution and inclusive growth, methods to enhance the effectiveness of startup financing by analyzing actual KODIT cases of enhancing SMEs’ financial accessibility using new financial technology. A discussion was held on that topic among the participants.

In the future, the two organizations will collect cases and research on various countries discussed on the day and publish them in a book so that more countries and stakeholders will be able to make good use of them.

“KODIT’s recent various start-up financing programs and innovative finance cases using new financial technologies can provide effective implications for Asian countries.” said Yoon Dae-hee, chairman of the KODIT in his opening speech. "I hope this conference will take SME finance in the Asian region to the next level."

In the meantime, KODIT, the Incheon Metropolitan Government and Incheon Techno Park signed an agreement on Jan. 14 involving account receivable insurance for SMEs in Incheon to support business stability and growth of local SMEs.

Under the agreement, Incheon City will contribute 1 billion won in premium support to KODIT, providing 80 percent of premiums (or up to five million won) per company for account receivable insurance paid by companies, and KODIT will discount premiums by 10 percent.

Incheon Techno Park plans to support companies with business promotions and consultations to encourage local SMEs to buy account receivable insurance.

Companies eligible for the beneficial program are SMEs that have factories or workplaces in Incheon and should be qualified to receive business stabilization funds from the Incheon Metropolitan Government.

Account receivable insurance is a public insurance system in which KODIT supports SMEs at behest of the Ministry of SMEs and Startups. KODIT compensates up to 80 percent of the losses incurred when insured SMEs fail to receive money for their credit sales to customers.

“We expect that this agreement will be a good example of local governments supporting local SMEs and injecting great vitality into their local economies,” chairman Yoon said. “We will put our utmost efforts into expanding the roles of the management safety board and support inclusive growth.”