Financial Policy Symposium 2012 for SME

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Hello, everyone!

A few days ago, I went to ‘Financial Policy Symposium 2012 for SME’. Mr. Choo Kyung-ho, the FSC’s Vice-Chairman, gave a key note speech at the symposium. For our blog readers who would have wanted to come to the symposium, I want to share the details with you.

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Since the Global Financial Crisis in 2008, SMEs have been suffering from management and financial problems. Consequently, SMEs are losing their role as a growth engine in our economy, which happens at an alarming pace. Responding to this phenomenon, the Korean government has implemented several policies to boost the economy and vitalize markets for SMEs. It it is now time to re-check those policies to see whether they are carrying out expected outcomes.

 

To evaluate the current policies, first of all, it is necessary to closely look at and analyze how SMEs are taking their role in the economy. This is for the purpose of designing proper policies, and thus addressing problems demanding those policy measures.

Second, after carrying out the analysis, the fund supply system should be invigorated to enhance SMEs’ efficiency. For this ends, the fund supply system needs to be separate. For example, private financial sector deals with well-performing and relatively strong SMEs, while less competent SMEs such as new market entrants and small-scale firms may borrow funds from public entities. This system, based upon cooperations between the public and private, will be able to cover all the fund supplies for SMEs, regardless of a company size.

Third, as well as the supply of fund itself, it is important to diversify channels of fund supply. For more various sources of fund, the government is focusing on venture capitals and a new stock market. Through new channels of fund supply, SMEs may be able to find it easier to finance their businesses.

Lastly, our financial system should build an excellent infrastructure to share information about SMEs’ credit ratings. This is one of the issues attracting lots of attention, as there are many people concerned that it is too hard to properly evaluate credit of SMEs. An excellent information infrastructure is also expected to ease the problem of information asymmetry in our financial system.

 

So, why should we care about SMEs? Assisting and fostering SMEs are not only about giving a hand to better performances of businesses, but also about vitalizing our economy in a long run, which will address our chronic problem of unemployment issue. This is because well-performing SMEs are the real sources of job opportunities. We would need further research and study on this matter, to keep seeking improvement of SMEs. If we do so, our economy does not seem that depressing but rather shiny!

 

한정화_명함

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