Korea to provide comprehensive financial support for major exporters

Financial Services Commission (FSC) Chairman Kim Joo-hyun visits a local exporting company in Yongin, Gyeonggi Province, on May 2. [Photo provided by Financial Services Commission]

Financial Services Commission (FSC) Chairman Kim Joo-hyun unveiled that the South Korean government will provide comprehensive financial support for export companies.

“We will first focus our support on companies exporting strategic products and then expand the scale, if necessary,” Kim said during a meeting with representatives from local exporting companies at the Knowledge Industry Center in Dongtan on Tuesday. “We will also encourage commercial banks to offer services tailored to the needs of exporters.”

The government, in the first place, is considering providing intensive support for companies exporting 20 strategic export items. They include eight major manufacturing industries - semiconductors, secondary batteries, displays, electric vehicles, high value-added shipbuilding, machinery/robots, petrochemicals and steel - and 12 new export growth engines - such as bio-health, nuclear power plants, national defense, smart farming and information and communication technology services - which were selected at the government’s export strategy meeting in February for export expansion this year.

The government’s financial support plan for these exporters is divided into three areas. First, the government will consider ways to give preferential discount rates on export bills or extend the maturity of import letters of credit. The government will also increase its support for refund guarantees for shipbuilders, which is a form of security for ship buyers who usually make advance payments on an order. If the ordered vessel cannot be delivered, a bank that has taken on the guarantee would make the refund.

Second, the government will enable commercial banks to provide services similar to those provided by policy finance institutions, including foreign currency loans and consulting programs. Third, the government will offer preemptive facility investment and financial support for research and development. Korea Development Bank will lend facility and operating funds to companies with export records on preferential interest rates of up to 0.6 percentage points.