The government and the financial sector will supply productive finance worth a total of 1,240 trillion won over the next five years. Private finance will take 614 trillion won, expanding support from the previous plan.

The Financial Services Commission on Tuesday held a productive finance consultative body for the financial industry at the Government Complex Seoul and reviewed the sector’s implementation plans and progress. The meeting was chaired by FSC Vice Chairman Kwon Dae-young (권대영) and attended by officials from the Financial Supervisory Service, financial holding companies, securities firms, insurers and policy finance institutions.

The consultative body is an expanded reorganisation of the existing productive finance communication and review meetings. It will operate as a regular forum with participation from private finance, policy finance and supervisory authorities. The FSC plans to use it to review and communicate project-level tasks for shifting the financial sector toward productive finance each month.

In opening remarks, Kwon said productive finance is a key policy to shift funding flows toward advanced industries, ventures and regions, away from existing practices centred on collateral and guarantees. He also stressed that productive finance is a key task for South Korea’s leap forward presented in the president’s New Year address, and that the financial sector should play a role in opening new growth paths.

The FSC reiterated three major shifts under the productive finance overhaul direction announced in September last year: from real estate to advanced and innovative firms, from deposits and lending to capital market investment, and from the Seoul metropolitan area to regional areas. It also explained policies it has pursued, including the launch of the National Growth Fund, a target system to expand regional finance, adjustments to banks’ risk weights, and the supply of venture capital by large investment banks.

Support plans for productive finance by private and policy finance will be expanded to a total of 1,240 trillion won over the next five years.

Private finance accounts for 614 trillion won and policy finance 626 trillion won. The FSC said it will not stop at announcing plans and will systematically manage and check actual execution and results.

Kwon stressed the importance of mutual understanding between finance and industry and called for strengthening internal capabilities to assess technology and growth potential. He also mentioned the need to set productive finance as a goal for the whole organisation rather than a task for a specific department, and to redesign overall structures for KPIs, compensation systems and risk management.

Financial holding companies said they are strengthening execution capacity for productive finance through organisational reshuffles and improvements to performance management systems. KB Financial Group reorganised its productive finance 추진 organisation and created a review unit for advanced strategic industries and a dedicated headquarters for growth finance. Woori Financial Group created a co-investment fund and produced and distributed a productive finance guidebook for all employees. iM Financial Group created a group consultative body and a dedicated organisation and built a cooperation system with local governments, aiming at region-specialised productive finance.

Securities firms focused on expanding the supply of venture capital. Seven large securities firms shared plans to supply venture capital worth 22.5 trillion won over the next three years. Korea Investment & Securities plans to strengthen financial support by corporate growth stage by using the National Growth Fund and comprehensive investment accounts. KB Securities said it plans to expand support for small and mid-sized firms through measures including expanding equity investment and introducing a shared-growth payment system.

In the insurance sector, 24 life and non-life insurers drew up productive finance support plans worth 36.6 trillion won. The FSC said it is also reviewing regulatory improvements to support insurers in expanding infrastructure and venture investments. Hanwha Life plans to invest about 5 trillion won in productive finance by 2030, and Samsung Fire & Marine Insurance also said it will expand infrastructure and technology-based investments.

Policy finance institutions also shared large-scale support plans. Korea Development Bank will 추진 the KDBNEXT KOREA programme worth 250 trillion won over five years centred on the National Growth Fund and expand support for small and mid-sized firms and advanced industries. Industrial Bank of Korea will 추진 an IBK-style productive finance project that supplies more than 300 trillion won over five years.

Kwon said this year should be the first year to show results from the productive finance overhaul, and that the government and the financial sector should resolve difficulties in the field through close communication and produce tangible results.