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KODIT
: The Best Practice of CGSs
Slide subtitle here
Korea Credit Guarantee Fund (KODIT)
12 May 2016
Contents
01. Overview of KODIT
02. Performance
03. Key Success Factors
04. Knowledge Sharing Program
01 :
Overview of KODIT
and CGSs in Korea
As of the end of Yr 2015
Our main businesses are…
There are three players in the market
Korea Technology
Finance
Corporation
16 Regional
Credit Guarantee
Foundation
Establishment
1976
Establishment
1989
Establishment
1999
Target market
All SMEs
Target market
Tech-oriented
Target market
Small & Micro
Source of funding
Central
Government
Banks
Source of funding
Central
Government
Banks
Source of funding
Local Government
Banks
Central
Government
Korea Credit
Guarantee Fund
And their market shares are…
KODIT
16 Regional CGFs
19%
57%
24%
Market
Share
KOTEC
Fiscal Year
2015
In ordinary cases…
Loan
Repay
When SMEs defaulted…
① Default
02 :
Performance
Of KODIT
For SMEs
For Government
For Banks
•
Ease access to
formal finance
•
Provide assured
collateral
•
Lower interest
rate
•
Introduce new
loan markets
•
Provide fund for
long-term
investment
•
Improve capital
adequacy ratio
•
Higher
competitiveness of
SMEs
•
Job creation &
supplement social
safety-net
•
Financial market
progress
•
Provide countercyclical macro
economic tools
Credit Guarantee as Countercyclical Tool
Asian
Financial
Crisis
100%
80%
25%
Burst of IT
Bubble &
Credit
Crunch
60%
Global
Financial
Crisis
20%
15%
40%
10%
20%
5%
0%
0%
'83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13
-20%
Source: Bank of Korea,
KODIT
-5%
(1 USD =
1,140KRW)
Consistent Default Rate
8.0
7.2
7.0
6.2
6.4
6.7
6.2
6.0
5.2
5.1
5.0
4.0
4.9
4.7
5.0
4.6
4.2
4.8
4.2
4.7
4.1
4.0
3.6
3.0
2.9
2.8
2.0
4.8
2.3
4.0
3.3
2.3
1.0
0.3
0.0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
(1 USD = 1,172
KRW)
03 :
Key Success Factors
of KODIT’s CGS
Korea Credit Guarantee
Act
Legal Fund
Basis
Mandate
Credit guarantee and
relevant services
Fund(no shareholder or
ownership)
Type of Entity
Government
Support
Liquidity risk is
covered
by the government(by law)
Government (irregular)
Subject to yearly budget of the government
Banks (regular)
Mandatory donation in proportion to monthly balance
of outstanding corporate loans of commercial banks
Others (irregular)
Occasional contributions from banks or large
enterprises
Guarantee Fee
SMEs pay 0.5 ~ 3.0% of annual guarantee fee
(upfront)
Average fee rate : 1.24%(as of 2015)
Government (irregular)
Subject to yearly budget of the government
Banks (regular)
Mandatory donation in proportion to monthly balance
of outstanding corporate loans of commercial banks
Korea Credit Guarantee Fund Act Article 6
①The equity fund of KODIT shall be built up with resources falling under
the followings:
1.Contributions from the government;
2.Contributions from financial institutions;
3.Contributions from enterprises;
③Financial institutions shall make contributions to KODIT such amount by
the rate as prescribed in the Ordinance of the Prime Ministry, within the
scope of not exceeding 3/1000 per annum of their loans.
Credit Risk
Liquidity Risk
Operational
Risk
Exposure
Default rate
Internal audit
Risk taking ratio
Leverage ratio
Monitoring
Portfolio management
system
04 :
Knowledge Sharing
Program
Knowledge Sharing Program is…
Concept
KSP Scheme
KODIT’s
Participation
KSP is a Development
Cooperation Program to
share Korea’s development
experience and knowledge
with partner countries
① Policy
consultation(bilateral)
② System consultation
③ Joint consulting with
International
Organizations(multilater
al)
KODIT offers policy
cosultation, system
consultation and training
program for the
establishment or
improvement of Credit
Evalution & Guarantee
System in partner
countries(since 2007)
KODIT builds a new avenue for developing economies’
credit guarantee schemes through KSP
Vietnam
(2007 ~
current)
Cambodia
(2010)
Mongolia
(2013)
Kazakhstan
(2011 ~
2015)
Indonesia
(2013 ~
current)
Ghana
(2012 ~
2013)
Myanmar
(2014)