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KOREA CREDIT
0 GUARANTEE FUND
Contents
Ⅰ SMEs in Korea
Ⅱ Credit Guarantee Scheme in Korea
Ⅲ An overview of KODIT
Ⅳ Credit Guarantee System of KODIT
Ⅴ Performances
Ⅵ Intensive Rescue Plan in 2009
Ⅰ SMEs in Korea
I. SMEs in Korea
1. The Scope of SMEs
▪ Criteria : 1) No. of Employees
2) Capital
3) Sales
No of
No.
Industry Capital Sales
Employees
Manufacturing < 300 Capital ≤ $8M
Construction < 300 Capital ≤ $3M
Telecom & Multimedia < 300 Sales ≤ $30M
Wholesales < 200 Sales ≤ $20M
Real Estate < 50 Sales ≤ $ 5M
I. SMEs in Korea
2. Korean SMEs by Industry [As of the end of Yr 2007]
Total No. of Enterprises
Construction 2,974,185
3% Wholesale
& Retail Total No. of Employees
28%
11,149,134
Services Manufacture
57% 11%
[By No. of Enterprises]
I. SMEs in Korea
3. Status of SMEs in Korea [As of the end of Yr2007]
▪ No of SME (99%) L Total: 2,976,646
enterprises SME 2 974 185
SMEs: 2,974,185
L 12,612,692
Total: 12 612 692
▪ No of SME (88%) (12%)
employment SMEs: 11,149,134
Total: 1 049billi
T t l 1,049billion USD
▪ GDP SME (49%) Large (51%) SMEs: 514billion USD
▪ Exports Total: 372billion USD
SME (31%) Large (69%) SMEs: 115billion USD
I. SMEs in Korea
4. SMEs Financing
▪ Disadvantageous Environment for SMEs
Interest rate on SME Loans
◦I t t t L
(Unit: %)
▪ Main Obstacles for SME Financing
◦ Insufficient Collateral
◦ High Risk of Default
◦ High Transaction Cost
Public Financing System for SMEs is Required!
Ⅱ Credit Guarantee System in Korea
II. Credit Guarantee System in Korea
1. History
Enforced『Th C dit G
▪ 1961) E f t Reserve F d S t 』
d『The Credit Guarantee R
『 Fund System』
▪ 1967) Enacted『The SMEs Credit Guarantee Act 』
『
▪ 1976) Founded Korea Credit Guarantee Fund (KODIT)
▪ 1989) Founded Korea Credit Technology Guarantee Fund (KOTEC)
Enacted『
▪ 1999) Enacted『The Regional Credit Guarantee Foundation Act』
』
▪ 2000) Established Korean Fed. of Credit Guarantee Foundation
-8-
II. Credit Guarantee System in Korea
2. Credit Guarantee Institutions
Target Source of Supervisory
Institution
Business Funding Organization
①Central Government Financial
KODIT
General ②Banks Services
(1976~)
[(0 225%±α)× SME L
[(0.225% Loans]
] Commission
Tech- ①Central Government Financial
KOTEC
Oriented ②Banks Services
(1989~)
Venture [(0.135%±α)× SME Loans] Commission
①G
①Government t
16 CGFs Small& ②Local Government Small & Medium
(1999~) Micro ③Banks Business Admin.
[(0.02%±α)× SME Loans]
-9-
II. Credit Guarantee System in Korea
3. Outstanding Credit Guarantee
KODIT KODIT
Outstanding CG Percentage to GDP
(Unit: Trillion KRW)
Total
KODIT
KODIT
KOTEC KOTEC
CG/GDP
KODIT
16CGFs
KOTEC
Whole CG/GDP 16 CGFs 16 CGFs
Ⅲ An overview of KODIT
III. About KODIT
1. Profile
Non-
▪ Status: Non-profit Special Legal Entity backed by Government
▪ Establishment : 1976
▪ Capital Fund : USD 4 billion (‘09)
▪ Outstanding Guarantee : USD 40 billion (‘09)
▪ No. of Employees : 2,200
▪ Biz Network : 1 Head office
8 Regional HQs, 99 Branches
III. About KODIT
2. Governance
Financial Services Ministry of Strategy Small & Medium
C i i
Commission Fi
& Finance Bi Ad i i t ti
Biz Administration
Operation Capital
Budget Planning
Supervision Contribution
Board of Policy
Chairman & CEO
- 13 -
III. About KODIT
3. Contribution to KODIT
Unit : million USD
1,440
388 1,584
262 457 590 664
443 79
255 457 255 111
- 14 -
III. About KODIT
4. Business Line
Infrastructure
Credit Consulting
Guarantee
Credit Credit
Guarantee Insurance
Integrate
Credit Guarantee Management
p g
for helping Consulting
Private Investment Co. for SMEs
to invest on SOC
Credit Guarantee Credit Insurance
for Liability of
y for SME’s Trade Receivables
promising SMEs
to Banks
Ⅳ Credit Guarantee System of KODIT
Ⅳ. Credit Guarantee System of KODIT
1. Basic Framework
Gov.
Contribution Supervision
Application Credit Guarantee
1 3
2
SMEs KODIT Capital Banks
Credit Review
Contribution
C t ib ti
Loan 4
Ⅳ. Credit Guarantee System of KODIT
2. Type of Credit Guarantee
▪ Guarantee for Bank Loans
▪ Commercial Bills Guarantee
▪ Guarantee for Bidding, Contract, etc.
▪ Guarantee for Payment Guarantees of Banks
▪ Tax Payment Guarantee
▪ P-CBO Guarantee
▪ Others
Ⅳ. Credit Guarantee System of KODIT
[Ref.] P-CBO Guarantee
▪ Primary Collateralized Bond Obligation
Ⅳ. Credit Guarantee System of KODIT
[Ref.] P-CBO Guarantee
- First introduced in July 2000
▪ Hi t
History In 2008, d P-CBO
- I 2008 KODIT resumed new P CBO guarantees t
to alleviate the financial straits of SMEs.
• Outstanding Guarantee 2,630M. USD
▪ Performances • Capital Fund 640M.
640M USD
• Leverage Ratio 4.1 times
(as of Dec.
2009) • Enterprises Guaranteed 1 260
1,260
• Supply Goal in 2010 1,700M. USD
Ⅳ. Credit Guarantee System of KODIT
3. Credit Rating System (CCRS)
Quantitative Qualitative Credit Rating
Cash flow F/S
Factor Factor
KS1 ~ KS3
Industry Grade KA1 ~ KA4
Quant. score Qual. score KB1 ~ KB4
KC1 ~ KC4
Total Score
KD1 ~ KD3
Pre-Grade KE1 ~ KE3
Override
Final Grade
Ⅳ. Credit Guarantee System of KODIT
4. Credit Line & Coverage Ratio
▪ Credit Line
√ Normal Ceiling for a Single Enterprise: KRW 3 billion
√ Special Ceiling for a Single Enterprise: KRW 7 billion
(Only Applied when necessary for national economy)
g
▪ Coverage Ratio
Rating KS1 KS2~KS3 KA1~KA4 KB1~KB3 KB4~KE3
Percentage 50% 70% 75% 80% 85%
√ Long term Users (over 10yrs) : -5%
Policy-
√ Gov. Policy-related Guarantee : 100%
- 22 -
Ⅴ Performance
Ⅴ. Performance
1. Credit Guarantee
Unit : million USD Unit : times
38,936
10.4 12
9.2 9.8
9.0 9.1 8.5 10
7.9 8.0 7.8
7.8 8
6
4
2
0
Leverage ratio
※ Including P-CBO
Ⅴ. Performance
2. Credit Insurance
Unit : million USD Unit : times
10.8
12
11.5 4,527
10
7.1 6.7 8
4.8 5.2 6
2.8 4
2
0
Ⅴ. Performance
3. Infrastructure Credit Guarantee
Unit : million USD Unit : times
4 145
4,145
12.8 13.6 14
12.4
10.2
11.6 12
9.7 10
7.9 8
6
4
2
0
Ⅴ. Performance
4. Significant Role on Korean Economy
The Growth Rate of GDP The Growth Rate of CG
The growth Rate The Growth
of GDP Rate of CG supplied
Ⅴ. Performance
4. Significant Role on Korean Economy
▪ Credit Guarantee-Effect on Korean Economy
√ As of the Yr 2008, CG Supplied: 24.7Billion US$
Effect on National Economy Numerical Value
1 Effect on Production 890 Million USD
2 Effect on Value Added 420 Million USD
3 Eff t on Employment
Effect E l t K. Persons
23 K P
Ⅵ Intensive Rescue Plan in 2009
Ⅵ. Intensive Rescue Plan
1. Liquidity Trap
Gov t Funds
Gov’t-Funds Target rate(%)
Unit : billion USD SME loan balance extended
in local currency
360 0
360.0 6.00%
6 00%
350.2 350.9 350.2
5.00% 345.7 347.4
350.0 342.7
337.9 340.3 5.00%
340.0
330 0
330.0
4.00%
320.0 3.00%
310.0 2.50% 3.00%
300.0
300 0 296.0 2.00% 2.00%
2 00% 2.00% 2.00% 2.00% 2.00%
2 00%
2.00%
290.0
280.0
1.00%
270.0
270 0
260.0 0.00%
07 08 09. 1 09. 2 09. 3 09. 4 09. 5 09. 6 09. 7
Ⅵ. Intensive Rescue Plan
2. Capital Injection
Unit : million USD
Enterprise
government 27
banks
1,584
104 74 1,440
555 624
‘07
07 08
‘08 09
‘09
Ⅵ. Intensive Rescue Plan
3. Blanket Support to help SME financing
Balance of credit guarantee over years Unit : billion USD
50.0 37.0
40.0
30.0 26.9
25.0 25.6 24.9 24.9 25.4
23.7 23.1
20.0 17.2 18.1
15.7
9.0
10.0
10 0
-
'97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09
Ⅵ. Intensive Rescue Plan
4. System Reform
As-
As-was As-
As-is
Thank You
Yong-Ju, Chin
International Affairs Team
www.kodit.co.kr
Website : www kodit co kr
E-mail: intl@kodit.co.kr
