KOTRA‧KODIT‧Shinhan Bank to Expand Financial Support Foreign-Invested Companies in terms of Employment and Creating New Growth Engine
The Korea Trade-Investment Promotion Agency (KOTRA) signed an MOU with the Korea Credit Guarantee Fund (KODIT) and Shinhan Bank on effective financing of foreign-invested companies on August 31 at the KOTRA headquarters in Seoul.
The agreement is for the small and medium-sized foreign invested enterprises that have contributed to job creation or are related to the new growth industry items. It contains the effort to promote financial aid to excellent foreign-invested companies that have created jobs, information sharing related to guarantee support between organizations and companies, identifying promising investors that will create jobs, and providing financial consulting.
KOTRA will provide guidance on financial services, and Shinhan Bank will support the SMEs with loan services based on reviews and letters of guarantee from KODIT.
The agreement is aimed at helping alleviate the difficulties of SMEs that have recently entered the Korean market and are contributing to the creation of jobs, but are facing challenges in financing due to the lack of experience and financial background in Korea.
The foreign-invested companies have consistently raised issues on difficult financing condition in Korea. According to KOTRA's "Survey of Difficulties Facing Foreign-Invested Companies in Korea's Investment Environment in 2017," difficulties regarding complicated financing procedures and high interest rates and loan commissions were picked as the major difficulties with the ratios of 30.5 percent and 23.5 percent respectively. The ratios increased by 12 percent point and 12.1 percent point respectively compared to last year, showing that the SMEs are struggling in using financial services in Korea.
SMEs that meet the requirements will be provided with an expanded guarantee rate of 100 percent for three years and get 0.2 percent discount in guarantee fees by KODIT and Shinhan Bank. It is expected to help resolve financing difficulties of foreign-invested companies which had hard times using loan services from the bank while they had a great potential in job creation and growth
"Taking this opportunity, we will strive to lower the barrier of financing for foreign-invested companies that have contributed to creating jobs, help their business settle and promote in domestic market and, therefore, create a virtuous circle of job creation," said, Kwon Pyung-ho, the President and CEO of KOTRA.
* Please refer to the attached file for details.
Source: Invest Korea (September 2, 2018)