The government is promoting the establishment of a fund dedicated to medium-sized enterprises. As previous government funds have been focused on small businesses, the intention is to prepare new support measures to back the growth of promising medium-sized corporations.
According to the government on the 27th, the Ministry of Trade, Industry and Energy recently commissioned a study on the 'feasibility of establishing a fund for medium-sized enterprises.' Based on the results of the study, it plans to analyze the necessity of supporting the growth of medium-sized corporations and design operational plans, including the structure of the fund and adjustment methods for its resources.
A government fund refers to assets that are established and operated under specific laws for certain projects. Funds supporting corporations include the Win-Win Cooperation Fund, the Fund for Small and Venture Business Start-up and Promotion (Mid-Sized Fund), and the Performance Compensation Fund.
Such funds are utilized for low-interest operating loans for small businesses or for supporting research and development (R&D) investment. They may also provide opportunities to expand collaborative projects with large corporations.
However, small businesses experience 'disruption of policy support' after they grow into medium-sized corporations. Even if a medium-sized corporation obtains funding through financial institutions, it has to bear higher interest rates than large corporations due to its relatively lower credit rating. For this reason, some small businesses exhibit a tendency to avoid growing into medium-sized corporations, referred to as the 'Peter Pan syndrome.'
A government official noted, 'The purpose is to further support promising medium-sized corporations in their transition to large corporations,' adding, 'We want to explore ways to support medium-sized corporations through existing funds for small businesses and establish a dedicated fund for medium-sized enterprises.'
He continued, 'However, we are still at the stage of commissioning the research and have not yet specified the scale of the fund or operational policies,' stating, 'Based on the results of the study, we will push for amendments to the Special Act on the Promotion of Growth and Competitiveness of Medium-Sized Enterprises and the National Finance Act.'
The government also plans to allow private entities to contribute to the fund for medium-sized enterprises. It is expected to operate by selecting individual projects of medium-sized corporations deemed to have growth potential each year for funding. The plan is being reviewed to provide low-interest loans and to recover a portion of the revenue generated by supported projects into the fund. To this end, the research will also assess the demand for private contributions from corporations.
Previously, the government announced last year that it would launch the first fund dedicated to medium-sized enterprises, funded by the five major commercial banks led by the Financial Services Commission: KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup. The fund for medium-sized enterprises is significant as it is the first fund established by the government specifically for medium-sized corporations.
Additionally, the government is reportedly reviewing plans to expand the 'Employment Permit System (E-9)' currently applied to medium-sized enterprises in the foundational industry to all medium-sized corporations. The Employment Permit System allows small businesses that cannot find local workers to obtain employment permits from the government to hire foreign workers.
A government official said, 'As the demand for foreign workers in medium-sized enterprises increases, we have also commissioned research to present measures to expand the utilization of foreign workers and improve the system.'