KB Financial Group
No Korean financial institution is better at serving small and medium-sized enterprises than KB Financial Group.
In 2019 the bank set up a so-called control tower to support startups and SMEs, led by chairman Yoon Jong-kyoo and 11 presidents and executives from the group’s disparate divisions. The aim is to form a W2 trillion ($1.8 billion) fund, with the aim of disbursing W400 billion in financial support to fast-growing startups and venture capital firms each year until the end of 2024.
SMEs lie at the heart of the Korean economy, accounting for 99% of businesses, 88% of employment, and 38% of exports, according to government data. New rules levied by South Korea’s Financial Services Commission on loan-to-deposit ratios in 2018 were designed to encourage banks to lend more to small businesses and have been a godsend for SMEs.
In 2019, bank lending to local SMEs rose by W30 trillion over the previous year. That number is expected to jump again for 2020, thanks to the government’s rapid response to the pandemic. A W41.8 trillion financial package, equivalent to 2.1% of GDP, was agreed in March by the government, the central bank and commercial lenders, helping SMEs to quickly secure loans via the Korea Credit Guarantee Fund and Korea Technology Finance Corporation.
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