The Korea Credit Guarantee Fund (KODIT) will actively push for the "great innovation" campaign this year under the slogan of "New Challenge! New Change!" "Based on confidence and creative challenging spirit earned in the process of tiding over the economic crisis, we will push ahead with the great innovation campaign to improve managerial efficiency and bolster competitiveness," said Ahn Taik-soo, chairman & CEO of KODIT. Related to this, KODIT has designated the "innovation day" twice a month and all the company staff will participate in an innovation meeting to seek ways of creating more jobs, establishing effective managerial strategy and developing new projects.
Differentiation of Credit Guarantees in 2010
Ahn said, "KODIT will also expand and differentiate its extension of credit guarantees this year. We will expand the total volume of credit guarantees by KRW700 billion from KRW42.3 trillion in 2009 to KRW43 trillion in 2010." The total will break down into KRW38 trillion for general credit guarantees and KRW5 trillion for asset backed guarantees. Ahn reinforced the fact, "This year, we will push ahead with a two-track policy for guarantee assistance. We will strengthen support for enterprises with high growth potential. At the same time, we will differentiate guarantee assistance by carrying out a restructuring program for marginal companies."
In particular KODIT will extend KRW23.6 trillion in credit guarantees to companies creating future-oriented growth engines and KRW12 trillion to those creating new jobs. "To actively support exporting companies that lead the economic recovery and green growth-oriented companies that propel new growth engines of the national economy, we will expand credit guarantees to them. By doing so, KODIT plans to contribute to the government's policy to increase more jobs," stated Ahn. In addition, "KODIT will play a role of "119" by supporting small and medium-sized companies that once experienced a business failure to help them regain hope for the future," insisted Ahn.
Reform of the Screening System to Improve Quality of Credit Guarantee
KODIT has adjusted its screening system to improve quality of credit guarantee. "For the first time, KODIT changed the standard on calculation of guarantee limit from the previous fiscal year's sales to the sales in the recent year to reflect latest corporate status. The step is designed to effectively cope with actual demands for funds by small and medium-sized companies and carry out more reliable guarantee screening," said Ahn.
Also, KODIT built a future-oriented screening system. KODIT has decided to support small and medium-sized companies with high growth potential by applying indicators to appraise future growth potential and management ability to companies that received more than 300 million in credit guarantees and adjusting the credit appraisal degree into the maximum of two stages.
"For professional and comprehensive judgment on companies, KODIT readjusted the comprehensive financial department into the guarantee screening department, which is in charge of professional screening," stated the chairman. The reform of the guarantee screening system is an epoch-making change in the KODIT history and will greatly contribute to improving quality of credit guarantee.
Introduction of an Advanced System
KODIT is operating a task force to push for introduction of an advanced system. The team comprising 11 staff members from the Planning Department and the Personnel Department has suggested 37 tasks, including a method to have efficient organization, after one-month study work, which started on April 15 of last year. It also mapped out detailed plans in June to carry out the 37 tasks under the leadership of an executive director of KODIT.
In August, members from both management and labor union participated in the task force for the first time since the establishment of KODIT and created the labor-management joint committee, a joint consultation body for mutual cooperation and survival, Ahn said. He went on to say, "On Sept. 3, labor and management finally agreed to introduce a performance-based annual salary system and expand the gap in performance-based pay. On Oct. 11, they reached an agreement to slash wages and make it obligatory for employees to use 25 percent of annual paid holidays. To keep effective manpower structure and inject fresh air into the organization, KODIT carried out a voluntary resignation system and 44 employees quit their jobs."
KODIT Played a Key Role in Tiding Over Global Economic Crisis
In 2009, KODIT played a key role in helping the country to wither out of the global economic crisis by extending KRW42.6 trillion in credit guarantees to enterprises, the biggest annual volume since the fund was established. Last year, KODIT supplied KRW39.4 trillion in general guarantees to companies. It also supported 58,000 newly established small and medium-sized companies with fresh funds of KRW17.5 trillion. "It also supplied KRW3.2 trillion worth of asset backed guarantees to small and mid-tier companies to help them wither out of the storm of the global economic crisis," Ahn said.
In the first half of 2009, the net increase of total loans to small and medium-sized firms by financial institutions amounted to KRW16.2 trillion. Of the total, KRW7.2 trillion or 44.4 percent were extended by KODIT in a form of loans on guarantee. Despite the fund's supply of biggest credit guarantees in 2009, the insolvency ratio stood at 4.3 percent as of November last year, much lower than the 14.5 percent recorded in the 1997-1998 Asian financial crisis, reflecting KODIT's efforts to pursue sound guarantee, Ahn explained. Thanks to such efforts, KODIT was selected as the best institution in terms of management results among quasi-government agencies by the Ministry of Finance and Economy in June 2009.