The Korea Technology Finance Corporation (KOTEC) under the Ministry of SMEs and Startups may be incorporated into the Ministry of Economy and Finance following the organizational restructuring of the Lee Jae-myung administration.
According to the financial sector and small business circles on the 5th, the government is currently planning to restructure financial organizations, including the Ministry of Economy and Finance and the Financial Services Commission, and public institutions under them are expected to be transferred to appropriate ministries.
The Presidential Committee on Policy Planning, which plays the role of the Lee Jae-myung administration's transition team, is expected to separate the budget function of the Ministry of Economy and Finance and establish it as an independent organization, while the Ministry of Economy and Finance will be reorganized into the Ministry of Finance. In this process, the domestic financial policy function of the Financial Services Commission is expected to be integrated into the Ministry of Finance, and institutions under the commission are also likely to be incorporated into the Ministry of Finance.
Currently, there are public financial institutions under the Financial Services Commission, including the Industrial Bank of Korea, Korea Deposit Insurance Corporation (KDIC), Korea Credit Guarantee Fund (KODIT), Korea Inclusive Finance Agency (KINFA), Korea Asset Management Corporation (KAMCO), and Korea Housing Finance Corporation.
There are also prospects that KOTEC under the Ministry of SMEs and Startups will be incorporated into the Ministry of Finance. KOTEC was previously a public institution under the Financial Services Commission but became part of the Ministry of SMEs and Startups when it was established during the Moon Jae-in administration in 2017.
The likelihood that KOTEC will be transferred to different ministries whenever the government changes is due to its role in 'financial support for small and medium-sized enterprises,' which is different from other institutions under the Ministry of SMEs and Startups. KOTEC is a specialized institution in technology finance that supports small and medium-sized enterprises lacking collateral to secure funds from financial institutions.
This suggests that the government's view of KOTEC, whether in terms of 'finance' or 'small and medium-sized enterprise' policy, leads to the repeated transfer to different ministries.
Experts express concern that such frequent organizational restructuring could negatively impact KOTEC and small and medium-sized enterprises.
A source in the financial industry noted, 'When the higher ministry changes, the direction and policies of the public institutions under it must inevitably change. Experiencing such changes each time the administration shifts causes tremendous stress and loss for the institution.'
Another financial industry source stated, 'After the government financial organizational restructuring is completed, there will be adjustments among the subordinate institutions,' adding, 'Decisions will be made based on how efficiently the Ministry of SMEs and Startups operated KOTEC and on the synergy that can be achieved when controlling financial institutions that support small and medium-sized enterprises and low-income individuals, such as the Industrial Bank of Korea, Korea Credit Guarantee Fund, and Korea Inclusive Finance Agency.'
Meanwhile, the term of Lee Jong-ho, the chairman of KOTEC, ended last November, but he has not been replaced, leading to his continued tenure. KOTEC sought applications for the chairman position at the end of last year, but the selection process was halted due to the Dec. 3 emergency martial law situation.