Do you remember that FSC’s Chairman Kim went to on-site tour in August? His tour was to visit industrial complexes in Korea and to hear ‘what are the facing financial difficulties’ experienced by SMEs. Having had a series of conferences with SME entrepreneurs during the tour, FSC came up with measures to support SMEs.
To make it sure that those conferences were not ‘one-off’ events, Financial Policy Bureau at FSC checked how SMEs are running their businesses these days. This is with concern for SMEs’ financial difficulties in case of a prolonged economic downturn.
In general, SMEs do not experience difficulties in loan markets. The supply of funds through loans is readily available for SMEs in need. The figures cannot exactly represent how SMEs actually feel in loan markets, but they are useful reference to represent current trends in loan markets. Moreover, the rate of overdue payment for loans is considered pretty stable, similar to that in last two years.
Globally and domestically, there has been a continuous downward pressure in real economy. Under this circumstance, SMEs demanded fewer funds for expanding and improving their facilities. Also, economically sensitive sectors, including building and construction industry, newly established SMEs, and small SMEs, felt greater financial challenges compared to others. However, with stable prices for raw materials, SMEs could save up their costs for materials.
Amid economic uncertainties, the smaller and less powerful SMEs are actually facing more financial difficulties. After checking these concerned voices by SMEs, FSC came up with new measures to deal with the confronting challenge.
FSC requested that related financial policy entities cooperate more actively by increasing the size of fund available for SMEs. To provide funds more effectively, FSC will carry on SME analysis in a specific manner. For example, the analysis will be based on classification by industry, size, region, and purpose of fund in need. This in-depth analysis will be done during December by FSC with cooperation with banking sector, research institutes and other related entities. It is expected that the analysis will be a good indicator reflecting financial situation faced by each SME. Furthermore, FSC continues to support start-up businesses and innovation in financial sector. All these measures have the same goal in common, ‘expanding credit availabilities and improving financial sector.’
Of course, Frank will bring you an update once FSC’s analysis comes out in next month. Please follow us and find out how measures are actualized and contribute to improvement in financial sector.
* Related Feature; Mr.Kim’s On-Site Tour