Beyond Financial Accessibility: Evolution of Credit Guarantee

CONTENTS

Financial Environment of SMEs in Korea

Roles of Credit Guarantee in Korea

New Path of Credit Guarantee

I

II

III

3

Seoul National University

Ph.D. in Economics 1995

M.A. in Economics 1985

Korea Credit Guarantee Fund

Chairman & CEO 2013.10 ~

Korea Institute of Finance

Director Planning & Cooperation Division

1995~2013

Hana Financial Group

Deputy President 2005~2009

Financial Supervisory Commission

Director General Corporate Restructuring Bureau

1998~2001

Korea Investors Service

Director Credit Rating & Research

1988~1995

4

▪ Type of Organization : Governmental institution

▪ Year of Establishment : 1976

▪ Capital Fund : 4.7 billion EUR

▪ Business Line-up : Credit guarantee 28 billion EUR

P-CBO guarantee 4.7 billion EUR

SOC credit guarantee 2.3 billion EUR

Credit insurance 9.1 billion EUR

▪ Number of Beneficiaries : 223,000

▪ Number of Employees : 2,704

▪ Business Network : 9 business headquarters, 102 branches

*Based on outstanding amount at the end of 2013

5

23.8 (21)

52.4 (45)

23.7 (20)

56.8 (196)

38.7 (134)

4.5 (15)

42.2 (332)

42.9 (337)

14.9 (116)

1997 2006 2013

(from1997)

x16

x7.5

x5.8

(Unit: %, billion €)

6

Korea Japan US

Benchmark interest rate* 2.25 0.1 0~0.25

Interest rate spread 1.7 0.9 3.0

SME loan default rate 2.06 2.1** 1.83

*As of September 2014 ** Default rate of total lending Source: IMD World Competitiveness Yearbook (2014)

7

20

30

40

50

60

70

80

2008 2009 2010 2011 2012 2013

%

%

%

%

%

%

%

50%

58%

42%

20

30

40

50

60

70

80

2008 2009 2010 2011 2012 2013

%

%

%

%

%

%

% 74%

72%

26% 28%

Source: Bank of Korea

8

-20%

0%

20%

40%

60%

80%

100%

-5%

0%

5%

10%

15%

20%

25%

'83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13

Asian Financial Crisis

Asian Financial Crisis

Burst of IT Bubble &

Credit Crunch

Burst of IT Bubble &

Credit Crunch

Global Financial Crisis

Global Financial Crisis

GDP Growth Rate

Credit Guarantee Growth Rate

Source: Bank of Korea, KODIT

9

370

422.4 443.5 441 454.9 461.3

489 508.8

보증이용률, 11.1% 보증이용률, 10.8% 보증이용률, 14.1% 보증이용률, 14.9% 보증이용률, 14.3% 보증이용률, 14.4% 보증이용률, 14.6% 보증이용률, 14.5%

2007 2008 2009 2010 2011 2012 2013 2014.6

중기대출잔액 보증이용률

255

291 299 304 314 318 337

11.1% 10.8%

14.1% 14.9% 14.3% 14.4% 14.6%

0%

5%

10%

15%

20%

25%

30%

0

100

200

300

400

2007 2008 2009 2010 2011 2012 2013

SME loan Percentage of guaranteed loan (Unit: billion €, %)

* Guaranteed loan : sum of loans guaranteed by KODIT, KOTEC and 16 local KGFs Source: Bank of Korea, KODIT

10

Creation of

new market &

Reinforcement of

existing market

Idea

Creativity

Knowledge opportunity

Unused technology

Commercialized technology

New technology

Potential innovative technology

Existing product

Existing industry

11

Enterprise value Policy tool

Life Cycle

12

Pre-start up Guarantee

Start-up Guarantee

Early Stage Guarantee

Growth Stage Guarantee

Profit/Loss

Business Stage

Time

Guarantee Product

13

Support promising SMEs to grow medium & large enterprises

Classification by growth stage : Frontier STAR → Rising STAR → KODIT STAR

Support exporting SMEs with technology and future prospect

Assist the expansion of SMEs to have global presence

Promote growth of hidden champions through IPO

(Financial support) P-CBO guarantee, guarantee with investment (Non-financial support) IPO-consulting, joint I/R session, etc.

14

Thank you