The Financial Services Commission plans to increase the annual size of the National Growth Fund from 30 trillion won to 40 trillion won. A dedicated asset management firm and fund focused on supporting technology companies will be established next year. To promote regional preferential finance, a 1 trillion won dedicated fund will be created. The commission will also actively encourage private financial institutions to launch inclusive finance-related products, while increasing the share of the second National Growth Fund allocated to low-income households from 20% to 50%.
On July 15, the Financial Services Commission outlined these initiatives during a business report meeting held at the Blue House, focusing on the theme of 'An Irreplaceable South Korea Felt in Daily Life.'
This meeting marked the first since December of the previous year, approximately seven months ago. The commission announced its plan to raise the annual operating size of the National Growth Fund to 40 trillion won this year, which will increase the total operating size over five years from 150 trillion won to 200 trillion won. New strategic industries, including aerospace, will be included in the support targets. The scale of direct equity investment support will increase from 3 trillion won to over 5 trillion won annually.
To support the leap to a technology powerhouse, a separate asset management firm and fund will be established. The commission plans to create a specialized management firm, tentatively named 'Korea Strategic Technology Partners,' by 2027, with a maximum size of 10 trillion won to assist companies holding core technologies. An 880 billion won ultra-long-term technology investment fund will also be launched.
Shin Jin-chang, the Secretary General, stated in a back briefing, "We will focus on investing in companies with core technologies that will lead the future and those that, while lagging behind foreign competitors, still possess competitiveness. We will concentrate support on 55 next-generation national strategic technologies to bolster our position as a leading industrial nation."
The Financial Services Commission also aims to enhance regional preferential policies to ensure more funds flow into local economies. It plans to allocate 40% of the National Growth Fund to regional investments and establish a new 1 trillion won regional dedicated fund. Additional policy finance institutions, including the Korea Credit Guarantee Fund and the Korea Trade Insurance Corporation, will be included to increase financial supply to local areas. Furthermore, a new 1 trillion won 'Growth Engine Preferential Guarantee' will be established, raising the guarantee ratio to 90%.
Shin explained, "We will refine the evaluation criteria for financial institutions to ensure that regional finance is effectively implemented."
The commission will also revise the financial system for inclusive finance. Starting this year with the banking sector, a comprehensive evaluation system for inclusive finance and the appointment of chief officers for inclusive finance will be introduced across all sectors next year.
Private financial institutions are encouraged to participate as well. Industrial Bank of Korea will offer products for low- to mid-credit borrowers at a single interest rate of 4.9%. NH Nonghyup Financial Group, which currently lacks a microfinance foundation, will be encouraged to expand specialized products. Additionally, a 'Sunshine Loan Special Guarantee Interest Payback' system will reduce interest rates for diligent repayers from 12.5% to 6.3%, while also addressing long-term delinquent debts and preventing illegal private lending.
The total growth rate of household debt will be managed within 1.5% this year. The commission will strengthen income assessments when calculating the total debt repayment ratio (DSR) and promote additional capital reserves for high-risk home loans to reduce incentives for lending.
Measures will also be put in place to regulate high-performance bonuses. Previously, if income increased by more than 20% compared to the previous year due to bonuses, the loan limit was calculated based on the average income of the last two years. However, the commission is considering extending this average income calculation to three years.
The allocation of the second tranche of the National Growth Fund (600 billion won) for low-income households will be increased from 20% to 50% to support low-income youth.
On July 15, the Financial Services Commission outlined these initiatives during a business report meeting held at the Blue House, focusing on the theme of 'An Irreplaceable South Korea Felt in Daily Life.'
This meeting marked the first since December of the previous year, approximately seven months ago. The commission announced its plan to raise the annual operating size of the National Growth Fund to 40 trillion won this year, which will increase the total operating size over five years from 150 trillion won to 200 trillion won. New strategic industries, including aerospace, will be included in the support targets. The scale of direct equity investment support will increase from 3 trillion won to over 5 trillion won annually.
To support the leap to a technology powerhouse, a separate asset management firm and fund will be established. The commission plans to create a specialized management firm, tentatively named 'Korea Strategic Technology Partners,' by 2027, with a maximum size of 10 trillion won to assist companies holding core technologies. An 880 billion won ultra-long-term technology investment fund will also be launched.
Shin Jin-chang, the Secretary General, stated in a back briefing, "We will focus on investing in companies with core technologies that will lead the future and those that, while lagging behind foreign competitors, still possess competitiveness. We will concentrate support on 55 next-generation national strategic technologies to bolster our position as a leading industrial nation."
The Financial Services Commission also aims to enhance regional preferential policies to ensure more funds flow into local economies. It plans to allocate 40% of the National Growth Fund to regional investments and establish a new 1 trillion won regional dedicated fund. Additional policy finance institutions, including the Korea Credit Guarantee Fund and the Korea Trade Insurance Corporation, will be included to increase financial supply to local areas. Furthermore, a new 1 trillion won 'Growth Engine Preferential Guarantee' will be established, raising the guarantee ratio to 90%.
Shin explained, "We will refine the evaluation criteria for financial institutions to ensure that regional finance is effectively implemented."
The commission will also revise the financial system for inclusive finance. Starting this year with the banking sector, a comprehensive evaluation system for inclusive finance and the appointment of chief officers for inclusive finance will be introduced across all sectors next year.
Private financial institutions are encouraged to participate as well. Industrial Bank of Korea will offer products for low- to mid-credit borrowers at a single interest rate of 4.9%. NH Nonghyup Financial Group, which currently lacks a microfinance foundation, will be encouraged to expand specialized products. Additionally, a 'Sunshine Loan Special Guarantee Interest Payback' system will reduce interest rates for diligent repayers from 12.5% to 6.3%, while also addressing long-term delinquent debts and preventing illegal private lending.
The total growth rate of household debt will be managed within 1.5% this year. The commission will strengthen income assessments when calculating the total debt repayment ratio (DSR) and promote additional capital reserves for high-risk home loans to reduce incentives for lending.
Measures will also be put in place to regulate high-performance bonuses. Previously, if income increased by more than 20% compared to the previous year due to bonuses, the loan limit was calculated based on the average income of the last two years. However, the commission is considering extending this average income calculation to three years.
The allocation of the second tranche of the National Growth Fund (600 billion won) for low-income households will be increased from 20% to 50% to support low-income youth.
* This article has been translated by AI.
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