272.3 Trillion Won Already Supplied Through July; Financial Sector Reviews Productive Finance Performance

[Financial News] The Financial Services Commission discussed with the financial industry how to develop performance indicators for productive finance. The FSC assessed that its so-called “productive finance” policy, which redirects funds tied up in real estate toward businesses, has contributed not only to financial-sector productivity but also to a sharp increase in South Korea’s gross domestic product (GDP).
On the 14th, the FSC held the fifth meeting of the Productive Finance Council for the Financial Sector at Government Complex Seoul. Chaired by FSC Vice Chairman Kwon Dae-young, the meeting focused on reviewing the progress of productive finance as of the end of July and discussing the direction for preparing a productive finance factbook containing disclosure materials.
In his opening remarks, Vice Chairman Kwon Dae-young emphasized, "As a result of the government and financial sector designing and implementing productive finance over the past year, productive finance is taking root across the financial sector and the broader industrial economy." He added, "Nominal GDP in the second quarter increased 26.4% from a year earlier, reaching its highest level in 47 years, while the gross operating surplus of the manufacturing, finance, and insurance industries rose 18.5%, playing an important role in growth." He also stressed the importance of a virtuous cycle in which funds from the financial sector flow into industrial sites, contributing to both industrial growth and financial-sector profits.
The FSC singled out several companies, including Export–Import Bank of Korea (Korea Eximbank) and Samsung Securities, to thank them for expanding productive finance. Korea Eximbank joined the policy-finance regional supply expansion target program in June and took on a role as a leading policy-finance institution. Samsung Securities obtained a license for short-term financial business on September 9 and plans to actively supply venture capital. According to the FSC, the financial sector had invested a total of 272.3 trillion won in productive finance by the end of July this year. Vice Chairman Kwon urged continued efforts to internalize and systematize productive finance capabilities, saying, "Changing established practices in the financial sector, such as requiring collateral and guarantees, is not easy."
The publication of a factbook summarizing the financial sector’s productive finance performance will begin in the fourth quarter of this year. Each financial institution plans to publish a “Productive Finance White Paper” around December. An “Annual Report on Productive Finance” is also scheduled for publication around May 2027.
The FSC plans to continue providing policy support so that a financial structure centered on technological capabilities and growth potential can become firmly established. Investment and lending immunity for financial institutions participating in the National Growth Fund is already in effect, and additional immunity measures for productive finance are expected to be prepared.
Shinhan Financial Group is pursuing productive finance as a key strategic task based on integrated group-wide governance. As of the end of July, 4.7 trillion won of the 5.9 trillion won increase in corporate loans had been supplied as productive finance-related loans. Woori Financial Group announced the 80 trillion-won Future Co-Growth Project over five years and raised its supply target to 90 trillion won in June. It supplied 22.9 trillion won by July, exceeding its target for the year. iM Financial Group is also incorporating its productive finance performance into executive and branch evaluations while launching productive finance products in cooperation with the Korea Credit Guarantee Fund (KODIT).
KIWOOM Securities is expanding its supply of venture capital by collaborating with university technology holdings, establishing a fast-track system for mezzanine investments, and overhauling its internal risk-management system. Samsung Securities plans to strengthen its role as a fund provider as a new short-term financial business operator and expand funding for small and medium-sized enterprises and venture companies.
Hanwha Life is expanding investment in regional infrastructure and infrastructure for future industries. Meritz Fire & Marine Insurance is encouraging active investment by designating a department dedicated to productive finance and adding productive finance items to its key performance indicators.
Among policy-finance institutions, Korea Development Bank (KDB) operates credit products worth 90 trillion won and is strengthening cooperation with the National Growth Fund. As of the end of August, the National Growth Fund had approved 17.9 trillion won in financial support. Of that amount, 7.22000 trillion won had been approved for companies based in regional areas alone. KDB is contributing to establishing a regional foundation for advanced industries. Industrial Bank of Korea (IBK) aims to supply more than 300 trillion won by 2030 through the 30-300 Project and had supplied 39.4 trillion won by the end of July. Korea Eximbank also plans to provide a total of 78.5 trillion won in credit this year.
In his closing remarks, Vice Chairman Kwon Dae-young said, "The government and financial sector have cooperated in promoting productive finance over the past year, and these efforts will continue in a way that contributes to national economic growth." The Productive Finance Council will continue operating to drive changes in the financial sector and hear difficulties encountered in the field. 
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