Written in January of 2001, this document is a news report that summarizes the main issues of the Plan to Expand Credit Guarantee for Corporate Fund Support which is backed by the Ministry of Finance and Economy, Small and Medium Business Administration, the Trust Guarantee Funds and Technology Guarantee Funds.
To facilitate the procurement of corporate funds, the government and credit guarantee institutions have decided to provide a total of KRW 73 trillion by providing KRW 54 in credit in 2001. It is a large increase, compared to KRW 43 trillion, including KRW 33 trillion, the previous year.
The government judged that it is essential to expand guarantees in the credit guarantee institutions and to support the financial institutions. The corporate bond market was depressed so procuring corporate funds became difficult, which was one of the expected conflicts that stemmed from restructuring.
This document contains detailed implication plans.
First of all, KRW 20 trillions’ worth of corporate bonds will be supported through KRW 10 trillions’ worth of primary collateralized bond obligations (P-CBO). To activate P-CBO issuance, the main creditor banks will lead, the credit guarantee limits will be increased in each company and in each group, the percentage of guarantee will be increased to the level that matches market demand, domestic and international investment will be induced and the guarantee will be supported by the insurance of rates in foreign money CBO.
Once the credit is complemented, a total of KRW 10 trillion will be allocated to 235 companies that have the potential to recover through KRW 7 trillions’ worth of collateralized loan obligations (CLO).
A total of KRW 43 trillion in facility, operation and fund assets will be provided by through a guarantee of KRW 37 trillion aimed at SMEs and venture companies. The institutional improvements include guarantee support for corporate purchase credit cards and an increase in the guarantee of execution security. In particular, the support for technology-concentrated companies would be prioritized through venture company P-CBO.
In order to ease the burdens of security deposits required by construction projects, the list of subjects that benefit from the execution of security guarantee will be temporarily expanded (by the end of 2002) to include private companies that satisfy certain standards. Furthermore, the management status of small business start-up guarantee was inspected and there are plans to extend the system in consideration of the market and unemployment situation.
The plan to form KRW 1.4 trillions’ worth of guarantee finances was established for additional financing of the credit guarantee institutions.
The expansion of supply for guarantees is expected to give breathing room for companies in fund shortage and credit stringency caused by conflicts such as restructuring.
기업자금 지원을 위한 신용보증 확충방안(Plans to expand credit guarantee for corporate fund support)
[서울] : 재정경제부; 중소기업청; 신용보증기금; 기술신용보증기금
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Financial Policy
Industry and Technology < Entrepreneurship
|Holding||재정경제부; 중소기업청; 신용보증기금; 기술신용보증기금|