South Korea's financial authorities will expand supply of the "Small Merchants The Dream Package", a financing support programme for small merchants, to more than 12 trillion won from 10.5 trillion won. They will lower financing barriers for early-stage startups and fully abolish joint guarantees applied to guarantees for securitisation special purpose vehicles for small and medium-sized firms (P-CBO).

The Financial Services Commission held the 14th Policy Finance Support Council meeting at IBK Industrial Bank of Korea on Sept. 21, chaired by Vice Chairman Kwon Dae-young (권대영), to discuss measures to expand financial support for startups, small merchants and small and medium-sized enterprises.

It will first increase supply of the Small Merchants The Dream Package from 10.5 trillion won to more than 12 trillion won. The package is a programme that provides preferential benefits such as interest rates and loan limits to small merchants who faithfully repay their debts.

Since it was announced in September last year, eight products have been rolled out sequentially based on circumstances such as start-up, growth and management difficulties, and 5.7 trillion won had been supplied as of August this year. The FSC plans to announce detailed revision measures to expand eligibility and support later this month.

Financial support for early-stage companies will also be strengthened. The bank and the Korea Credit Guarantee Fund signed a business agreement on the day and launched the "Startup Build-up Programme".

Even if sales and financial transaction history are insufficient, early-stage startups with technological capability and growth potential will receive eased guarantee requirements, with priority support of up to 100 million won. After 1 year from the initial support, the guarantee limit will be expanded to up to 200 million won after reassessing growth potential and creditworthiness, and principal repayment will also be able to be deferred for the following 3 years.

To reduce the financing burden on small and medium-sized firms, joint guarantees applied to P-CBO will also be fully abolished. The FSC expected the measure would generate an annual effect of exempting joint guarantees on about 1.9 trillion won, based on last year's supply volume.

Long-term investment in national strategic technologies will also be expanded. The FSC plans to support the launch within the year of a specialised asset manager, Korea Strategic Technology Partners (KSTP), jointly established by private financial companies with the Korea Development Bank and Korea Growth Investment Corp at the centre.

KSTP aims to provide up to 10 trillion won over five years by supplying 1 trillion to 2 trillion won a year to fields such as quantum supercomputing and other future foundational technologies, and core technologies with high dependence on overseas sources. It plans to complete incorporation and licensing within the year and 추진 its first business in the first half of next year.

Kwon said, "Let us prepare so that the tasks discussed today, such as strengthening funding support for early-stage startups and investment in national strategic technologies, and expanding financial support for small merchants, can be implemented well as intended."