By Kang Seung-woo
Staff reporter
The Korea Finance Corporation (KoFC) was spun off from the Korea Development Bank (KDB) last October, as the state-run lender's first step toward privatization.
But the newly-established agency assumed the public-financing functions of the KDB with dedication, seeking to contribute to the national economy and open a new dimension of policy-based financing in Korea.
Under the vision, the KoFC, presided over by Ryu Jae-han, helps small- and medium-sized enterprises (SME) to raise money easily, and supplies and manages funds required for the growth of the economy, such as the development of regions, the extension of social infrastructure, the development of new growth engine industries, the stabilization of financial markets, and the facilitation of sustainable growth.
The KoFC aims to foster the growth of SMEs through diverse means stipulated in its charter, and represent those with high growth potential with intermediary lending institutions.
In its quest to enhance the nation's growth potential, the KoFC provides financial support for large-scale social infrastructure or regional development projects, which are difficult to finance due to the enormous amount and duration of investment.
Depending on public interest and potential financial benefits, it can participate as an equity investor, a loan syndication partner or a credit guarantor, which helps encourage private investment.
The organization plans to serve as a market safety net through its corporate restructuring activities.
Aiming at companies to which the Corporate Restructuring Promotion Act applies, or restructuring companies under creditor banks' council agreement and pre-workout programs, the KoFC will provide loans and guarantees to them.
The corporation will assist structural improvement of Korea's financial industry for the on-going stabilization of the financial market.
As part of the scheme, the Financial Market Stabilization Fund to be established to build a framework for a preemptive response to potential future financial market instability.
In the case of a credit crunch, it will provide emergency funding, direct investment and credit guarantees.
The KoFC intends to nurture next-generation growth engines for Asia's fourth-largest economy.
The government spelled out 17 new growth engines, including renewable energy and global healthcare, which will drive the national economy over the next three to 10 years.
So, the KoFC will help boost growth potential through large-scale, long-term facility financing and R&D investments in new and renewable energy-related industries, and basic materials.