The government will provide a total of 164 trillion won in policy finance to local regions to promote balanced regional development. The regional investment volume of the Public Growth Fund will also be expanded from 12 trillion won to 16 trillion won per year. Lee Eog-weon, chair of the Financial Services Commission (FSC), reported this at a presidential policy briefing held at the Blue House state guesthouse on the 15th.
The Financial Services Commission (FSC) said it will strengthen preferential finance for local regions to promote balanced regional development. First, it will expand the local supply target of policy finance institutions from 100 trillion won in 2025 to 164 trillion won in 2028. It will also increase the regional investment volume of the Public Growth Fund from 12 trillion won to 16 trillion won per year and create a 1 trillion won regional-only fund over the next five years.
For leading regional strategic industries, the Korea Credit Guarantee Fund (KODIT) will create a 1 trillion won "growth engine preferential guarantee." It will also promote financial support for corporations recommended by local governments and banks through joint contributions.
In the private institutional sector, the government will introduce a "three-piece community-focused livelihood finance package." It will promote converting credit card points into local currency and support vulnerable groups such as seniors living alone by combining win-win insurance with healthcare services. In areas without bank branches, it will also implement bank agency services through post offices.
It will also prepare regulatory incentives to expand local financial supply, including joint lending by regional banks and internet banks, granting additional loan limit to regional borrowers of savings banks, and reflecting the local lending performance of mutual finance institutions. The local reinvestment evaluation system will also be improved to induce financial institutions to supply funds to the regions and expand lending to local small and medium-sized corporations and low-income residents.
Support for young people will also be expanded. The Korea Credit Guarantee Fund (KODIT) and IBKIndustrial Bank of Korea (IBK)(024110) will create a 200 billion won "promising youth startup guaranteed loan" with preferential interest rates and guarantee fees. Financial support for youth startup corporations will also be expanded to 2.2 trillion won this year.
The government will also prepare a plan to introduce a youth initial asset-building program through the capital market in Dec. It will build a medium- to long-term asset-building ladder by strengthening linkages among youth support policies. One option under review would provide a 0.2 percentage point preferential rate on the Youth Future Installment Savings if a young person completes government financial counseling.
For young people and foreigners with limited financial histories, it will introduce a credit card issuance system using alternative credit assessment and improve the system so that even those without financial histories can receive credit cards by using deposits as collateral. Of the 600 billion won second tranche of the Public Participation Growth Fund, the allocation ratio for low-income residents will be expanded from the current 20% to 50%.
Support for small business owners will also be expanded. The AI-based small business–specialized credit scoring model (SCB) will be applied to 16 banks to support 2 trillion won in loans. The "Small Business The Dream Package" will also be increased from the current 10.5 trillion won to more than 12 trillion won.
The application period for the Fresh Start Fund will be extended through 2027, and the scope and level of support will be adjusted to focus aid on borrowers in need. It will also help subcontractors recover funds, including shortening the settlement maturity of accounts receivable collateral loans from 90 days to 60 days.