The Financial Services Commission held the 4^th consultative body meeting on policy finance support with the related government ministries, policy financial institutions and a young entrepreneurs foundation on September 25. The consultative body on policy finance support was created last year to ensure more close alignment between the government’s industrial strategies and supply of policy funds. In the five key strategic areas, the authorities last year pledged to supply a total of KRW91 trillion in policy funds support for 2023.

As of August 2023, policy financial institutions have supplied a total of KRW73.8 trillion of policy funds support in the five key strategic sectors, achieving 80.4 percent of the annual supply target and surpassing the initial supply plan of 66.7 percent by the month of August. Along with concerns about an economic slowdown emanating from China, FSC Vice Chairman Kim So-young said that it is possible that interest rates and oil prices may continue to stay high for a while. Thus, in close coordination with relevant ministries, Vice Chairman Kim said that the authorities will work to ensure effective supply of policy funds to businesses to prevent funding shortages.

To help ensure a continuous supply of policy finance support in each industry, the authorities discussed ways to more closely implement various industrial policy programs overseen by relevant government ministries with appropriate budget planning. In this regard, Vice Chairman Kim said that in order to provide policy finance support to various industrial sectors on a continuing basis, it is crucial to have a closer linkage between the supply of policy finance and fiscal planning.

The authorities also discussed ways to overhaul the operation of “Growth Ladder Fund,” a fund dedicated for SMEs and venture businesses whose 10-year investment period has ended in August. The new “Growth Ladder Fund” will focus on investing in underfunded areas such as deep tech and climate sectors where the private sector alone faces difficulties in making investment. As such, every year, some KRW200 billion collected from initial investment from “Growth Ladder Fund” will be reinvested to create more than KRW1 trillion funds to create a secondary market and make investments in strategically important areas. In this regard, Vice Chairman Kim said that the new “Growth Ladder Fund” will play a more active role in supplying venture capital to the strategically important areas needed in the current global economic, trade and financial environment.

* Please refer to the attached file for details.