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Transcript
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)