Q: Can you tell us about the roles and achievements of KODIT
A: Since our establishment in 1976, we have devoted ourselves to giving helping hands to business circles by closely working together with the government. We have also created value-added profits so that the national value could be greater. We have committed ourselves to the role of helping those who have new and excellent technologies with less money. During the turmoil of the financial crunch from 1997 to 1999, we prevented businesses from going bankrupt because of the shortterm lack of money. Swift and bold actions at that time worked well and saved a lot of jobs from disappearing. I am very proud of having played the role of firewall in the economic disaster.
We also burnt the midnight oil to draw an urgent bailout plan for small businesses smashed by natural catastrophes like typhoons and floods. We were very happy to see those who had gotten special guarantee funds from KODIT come alive and run their business. Overall, we have fulfilled our role well by extending credit guarantee services to promising enterprises that lack tangible collateral and stimulating sound credit transactions through the efficient management and use of the credit information. Fully 43% of the KOSPI enterprises and 66% of KOSDAQ companies got listed in those two stock markets based on a credit guarantee by KODIT.
Q: A huge number of enterprises are suffering severe financial deadlock in the whirls of the global credit crunch which started in October 2008. They said that the most critical damages - for example the lack of liquidity - were poured onto the roofs of small businesses. How do you respond to the situation
A: We formed an emergent task-force to cope with the crisis, especially to deal with the liquidity issues. If we failed to act swiftly and boldly, the avalanche of the liquidity crisis would break the whole chain of credit in the economy. We increased the total volume of credit guarantee services from 28 trillion won to 29.5 trillion won and designed new credit guarantee services for enterprises so that they can secure liquidity on the basis of the credit guaranteed by KODIT. And we issued Collateralized Bond Obligations (CBOs) worth one trillion won so that small enterprises could sell them in the direct financial market for money. We also adopted the construction bridge loan guarantee to support small construction companies suffering from a severe lack of orders. We are closely working together with the Korea Development Bank and the Industrial Bank of Korea.
Q: Can you explain KODIT's services
A: KODIT administers three different types of capital funds that constitute the capital resources for services. They are capital funds for credit guarantee services, capital funds for credit insurance services, and capital funds for infrastructure credit guarantee services. The main sources of the capital funds for credit guarantee services consist of contributions from the government, financial institutions and enterprises, the credit guarantee fees, and the revenue earned from the management of surplus capital funds. All banks in Korea, according to the Korea Credit Guarantee Fund Act, have to make contributions at the rate of 0.25% per annum on their outstanding loans. Under Article 25 of the Act, KODIT may provide credit guarantee services up to 20 times its capital funds. KODIT tries to maintain the total amount of credit guarantee services at around 10 times the capital funds in order to manage the funds soundly.
Capital funds for credit insurance services are from governmental contributions. The maximum amount for underwriting by KODIT shall be less than 17 times the capital funds for credit insurance.
Capital funds for infrastructure credit guarantee services are called Korean Infrastructure Credit Guarantee (KICGF). KICGF is composed of contributions from the government. The amount of total infrastructure credit guarantee shall be less than 20 times the KICGF.
Q: Can you tell us about your ethics management
A: In 2007, KODIT joined the UN Global Compact to carry out ethics management along global standards. Accordingly, KODIT reorganized its ethics management system by elucidating its ethics values and strengthening its organization and training programs. It also solidified the foundation for Ethical KODIT, touching KODIT through various activities to improve customer satisfaction and boost the mind-set for ethics management.
Q: How do you see the future of the Green Industry Do you have any plan to support the emerging Green industries
A: I think Green Industry will be a future growth engine not only for the Korean economy but also the world economy. The call for Green Industry has already been made amid the rising concern on Earth's aggravated environment. Businesses ignoring the environment cannot catch customers' eyes in the markets. “Less emission of carbon dioxide, greener growth” are the key words that all businesses should bear in mind. The time is coming when Green enterprises can get credit guarantees more easily than non- Green enterprises. It is natural that non- Green enterprises emitting carbon dioxide off the permitted level will find it harder and harder to earn credit in the financial market.
KODIT will stand in line with the global initiatives calling for Green Growth. Businesses can no longer disregrard climate change issues while striving for economic growth. KODIT is considering giving higher credit lines to Green enterprises.