The Gyeonggi Credit Guarantee Foundation (GCGF) is an organization with many firsts and bests. The GCGF was founded as Korea’s first credit guarantee foundation. In 2011, GCGF was designated as the best public organization in Gyeonggi Province for five years running. At the same time, the GCGF was certified as the best workplace for the time as a public organization in Gyeonggi Province. In addition, GCGF became the first Korean credit guarantee foundation to sign an agreement to cooperate with a foreign credit guarantee organization.
“Since the outbreak of the global financial crisis at the end of 2008, the foundation has expanded credit guarantees while placing its top priority on overcoming the economic crisis,” said Park Hae-chin, chairman of the Board of Directors at the GCGF. “In 2011, the GCGF provided credit guarantees amounting to KRW 1,200 billion to about 30,000 companies as of the end of November. Such credit guarantee services made a huge contribution to injecting energy into the local economy, which resulted in the prevention of companies from going bankrupt, the activation of investment and the creations of jobs through financial support for small and medium-sized companies in the province amid unstable economic situations at home and abroad.”
Over the past three years, the number of companies receiving financial support from the GCGF and the amount of the financial support increased more than 2.3 times and about 1.7 times respectively, compared to those of 13 years from the establishment of the GCGF to the outbreak of the financial crisis. In August, GCGF proved its huge contribution to promoting economic stability of small and medium-sized business owners by reaching KRW nine trillion in credit guarantees, a first for a local credit guarantee foundation in Korea.
In particular, GCGF helped small business owners financially get on their feet by providing financial support of KRW 520 billion to 65,000 small business owners from the start of the financial crisis to the end of 2011. GCGF continued to campaign against private loans, and gave financial support of KRW 250 billion to 10,000 companies in order to help them stop using them. It effectively reduced interest costs by KRW 80 billion. From 2010 to 2011, GCGF also supported 1000 companies with KRW 40 billion. Those companies included green industry companies, agricultural and bio companies, and start-ups of entrepreneurs in their 30s and 40s.
“The most remarkable point of the GCGF’s performance in 2011 is the fact that the foundation has expanded contributions through diversified efforts,” Chairman Park emphasized. “Most of the contributions for GCGF came from Gyeonggi Province. But recently, Gyeonggi Province has had trouble expanding the size of its contributions due to financial difficulties, due to a decrease in tax revenues.”
The GCGF secured a total of KRW 99 billion in contributions by endeavoring to receive obligatory contributions from financial institutions, signing additional contribution agreements with the National Agricultural Cooperative Federation, Kookmin Bank, Shinhan Bank, IBK, Woori Bank and Hana Bank and securing special guarantees from cities and counties in Gyeonggi Province. Such efforts have paid off. The core asset of GCGF is expected to reach a total of KRW 522.8 billion at the end of this year from KRW 198.7 billion in 2004.
However, GCGF still judges that they need more contributions in order to support small companies and small business owners. Accordingly, this year, the foundation is planning to make a new attempt at securing contributions. In September 2011, Chairman Park sent a letter to the Federation of Korean Industries to ask for funding. “If big companies contribute money to local credit guarantee foundations and local credit guarantee foundations provide credit guarantee services for small and medium-sized business owners, the large companies can realize a win-win growth without changing laws and systems and doing it directly,” Chairman Park emphasized in the letter.
“The GCGF is planning to prepare various measures to receive contributions from large companies,” Chairman Park said. “The direction of GCGF in 2012 is to maintain an active attitude and to lead unviable companies to undergo voluntary restructuring by ending support for them. The GCGF will intensively support future growth engine industries with growth potential and competitiveness.”
GCGF is planning to reinforce its support for main support objects such as the green industry, the high-valued added service industry and small exporting companies, facility investment, research and development and creating jobs for marginalized people in 2012. The foundation is also expanding support for social companies that contribute to the public good. “At the same time, we will create an environment for creating jobs and expand support for start-ups, newly invested companies, companies whose owners are young or women, and companies that create jobs in four categories designated by the government,” Chairman Park said.
“Before the effectuation of the Korea-U.S. FTA, we will improve the competitiveness of some Korean industries vulnerable to products imported from the U.S. such as the agricultural, livestock and pharmaceutical, by giving them specialized support,” Chairman Park added. “We are also planning to increase support for promising growing industries such as the textile, automobile, electronics and machine parts industries and help small and medium-sized companies in Gyeonggi Province turn the Korea-US FTA into opportunities to take off.”