|SUBJECT||Global PaSS Program Initiated for Marginalized Groups and Export SMEs - Part 1|
On Dec. 1, Korea Eximbank initiated a comprehensive support program for global coexistence and development called the Global PaSS Program in order to provide financing for the stable growth of exporting SMEs entering overseas markets with large corporations or supplying goods and services to such companies. In addition, the Bank initiated PaSS with the aim to strengthen support for marginalized sectors such as multicultural families.
The Global PaSS Program takes advantage of Korea Eximbank’s strength in supporting various overseas transactions regarding export, overseas investments, and aid and induces active participation by large corporations and related institutions.
PaSS is largely comprised of three programs: i) Partnership in Overseas Business for SMEs (for SMEs entering overseas markets with large corporations), ii) Sustainable Growth with SMEs (for SMEs with new growth technologies), and iii) Seed (for people in need).
1. Partnership in Overseas Business
With direct overseas investments by Korean companies expanding since 2000, exports through overseas Korean corporations have been increasing. However, SMEs entering overseas markets with large corporations continue to face difficulties in securing local financing due to their low credit ratings and insufficient brand recognition.
To alleviate such problems by SMEs entering overseas markets with corporations which have cooperative MOUs with Korea Eximbank, Korea Eximbank has gone beyond traditional loan methods based on assessment of guarantees provided by parent companies or collateral in Korea to provide direct loans based on localized analysis of credit and collateral such as sales receivables from long-term purchase contracts with large corporations or credit assessment of the overseas SME in question.
Also, Korea Eximbank plans to utilize its global networks to provide overseas Korean SMEs with indirect support such as local currency loans with local factories as collateral and factoring through overseas partner banks.
Through this program, Korea Eximbank hopes to assist overseas Korean SMEs having difficulties in securing local loans due to their low credit ratings so that they may win long-term contracts with corporations. In addition, SMEs would be provided with quality financing of KRW 800 billion at favorable rates to ensure smooth business operations.
2. Sustainable Growth with SMEs
There are many SMEs with advanced technologies in new growth sectors such as software development and knowledge-based services which have supply contracts with large corporations but find it difficult to secure sales channels or funding for operation due to their low credit and small size.
Recognizing such difficulties, Korea Eximbank will collaborate with the Korea Technology Credit Guarantee Fund and corporations to simplify project review processes and provide favorable interest rates and guarantee fees while assuming some credit risks.