Shinhan to focus on 'innovation finance'

Cho Yong-byoung

By Lee Kyung-min

Shinhan Financial Group will launch a large-scale in-house committee to better help small- and medium-sized firms (SMEs) including venture startups, it said Sunday.

With a clear mission of enhancing efficient corporate financing and SMEs investment as well as establishing a group-wide platform, the committee will seek to boost close coordination among the group's 2,000 workers with 110 departments of 14 subsidiaries.

Led by group chairman Cho Yong-byoung, group subsidiaries' CEOs will serve as committee members.

Shinhan Bank will lead the corporate financing and the group plans to give 24 trillion won ($21 billion) in loans over the next three years. The amount will be increased to 46 trillion won by 2023.

Measures to revise corporate financing include recognizing intellectual property as leverage when seeking loans.

This will help budding startups and ventures that have yet to make profit despite their growth potential.

More departments will be added to strengthen loan screening process involving firms with new technology-based business models.

The program will also be improved to better project business profit prospect based on “Industry Weather Board System,” a data analysis mechanism with full, accurate use of preceding indicators as well as consumer business confidence data.

Reviews will be held to ease rules on repayment of loans for budding SMEs experiencing liquidity problems to better help them pursue long-term business plans. Consultations will be given to firms with less than seven years of business experience.

For the second objective, the group's global investment banking department will lead the SMEs investment.

The group will maximize the function of Futures Lab, a joint project launched in 2015 to create a cooperative financial ecosystem between financial services entities and fintechs.

As of 2018, 72 startups have been approved for the program. They have made a combined 12 billion won direct investment. The estimated value of the 72 is about 291 billion won.

The lab has helped and will continue to help domestic firms establish business in Vietnam, a key area of future growth for the group.

The group will strengthen management of private equity funds set up to help SMEs.

This is an aggressive move compared to the status quo whereby private entities have only followed the lead of the government initiative in selecting and operating of such funds.

The group plans to increase the venture capital fund to 140 billion won from the current 100 billion won over the next few years.

More efforts will be made to boost the network between conglomerates whose business priorities value social responsibility.

A 20 billion won fund jointly set up with SK Group will be expanded over the next five years, to create a business environment where profit generation and corporate responsibility are equally appreciated.

The group's think tank Future Strategy Institute will set up an innovative growth platform.

The platform will be closely integrated among startups, venture capital investments, financial services firms and the government.

Tailored consultations will be offered in areas of legal, accounting, marketing and overseas business expansion issues, through sharing knowledge and experience of previous success cases.