The government will introduce a "regional finance supply expansion target system" and supply 120 trillion won to the regions.
Lee Eog-weon, Chairperson of the Financial Services Commission (FSC), on the 22nd held a "finance roundtable favoring regions for revitalizing regional economies" at the Busan Bank headquarters in Nam-gu, Busan, and announced this policy.
At the roundtable, the Chairperson said, "The gap between the Seoul metropolitan area and the regions keeps widening, and the concentration of funds and people is getting worse," and added, "We need to soberly reflect on whether finance has contributed to the concentration in the metropolitan area."
Starting next year, the Financial Services Commission (FSC) will introduce a regional finance supply expansion target system for the four major policy finance institutions—Korea Development Bank, Industrial Bank of Korea (IBK), Korea Credit Guarantee Fund (KODIT), and Korea Technology Finance Corporation (KOTEC)—and raise the share of non-metropolitan funding from the current 40% to 45% by 2028. The regional supply by policy finance institutions is expected to increase by about 25 trillion won, from 96.8 trillion won this year to more than 120 trillion won in 2028.
Policy finance institutions will expand loan and guarantee products for corporations relocating to the regions, regional flagship industries, and corporations facing management difficulties. They will also create a package of region-only funds, including a regional corporation scale-up fund, a regional revitalization investment fund, and a regional corporation fund, injecting 15 trillion won over three years. Each institution will set annual targets and have its implementation performance regularly reviewed through the Policy Finance Council.
Of the 150 trillion won "National Growth Fund" being formed, 60 trillion won, or 40%, will be invested in the regions.
For private finance, the government will expand regional funding by easing the loan-to-deposit ratio regulation for regional small and midsize enterprise lending and strengthening incentives under the "regional reinvestment assessment." To supplement the limited branch networks of regional banks, it will promote joint lending with internet-only banks and the activation of agency services among regional banks.
The Chairperson said, "We will mobilize every financial tool to support each region's industrial capabilities so they can become growth engines for our economy," and added, "We will execute policies more precisely and swiftly so they can be felt on the ground."