FSS chief vows SME helpCHANGWON, South Gyeongsang - The country’s financial regulator will devise measures to offer small- and midsize businesses more financial policy support, which currently is centered on large companies in the Seoul area, the new governor of the Financial Supervisory Service, said yesterday.
“Financial services [like counseling centers] are focused on customers and companies in the Seoul metropolitan area,” Choi Soo-hyun said during a visit to the headquarters of Woosu AMS, an SME that produces automobile parts. “They [financial services] should be spread across the country.”
As part of its support, Choi said the FSS will work to accelerate SMEs’ direct financing including issuing corporate bonds and shares so they can access capital more easily. So far, small firms have faced challenges in the direct financing market because their credit ratings tend to be lower than those of large firms. According to the FSS, 65 percent of SMEs’ direct financing is from banks and 25 percent is from policy funding. Only 2.3 percent is from issuing corporate bonds and 0.2 percent from shares of stock.
“We will also consider measures to differentiate the information disclosure system between large and small firms so that the procedure for [the latter group] is more simple,” Choi said. “Currently, all listed firms are required to disclose their information separately to Korea Exchange and the FSS, but we plan to discuss with Korea Exchange allowing a more simplified procedure for SMEs, such as posting information to just one of the two institutions.”
Choi added that since many of the country’s SMEs are not familiar with the information disclosure system, “[the FSS] will require fewer number of categories for disclosure for SMEs compared to large firms.”
The governor’s remarks came before he met with 15 heads of SMEs in Changwon, South Gyeongsang, on his first site visit since his inauguration earlier this week. Changwon is an area where industrial and engineering operations of SMEs are clustered. Along with Choi, executives from Kyongnam Bank were present to discuss problems SMEs face in promoting their businesses. Choi, in line with the Park Geun-hye administration, has emphasized enhancing policies and programs supporting ordinary and low-income households, and small businesses.
“There have been many government policies in regard to SMEs,” Choi said. “Even in the new government, finance should be all about saving companies, especially SMEs, rather than simply playing the role of providing funding. We will promote policy measures so that financing is able to save firms.”
SME executives have expressed frustration, however, and called for more state support.
“If we are offered more financial support, business will be much easier,” said Jeon Jong-yin, chief executive of Woosu AMS.
“Since we are involved in the automotive business, we have 50 other sub-contractors. When I visit them, there are some small companies that facilitate their factories by leasing and using their machines and equipment for collateral.”
By Lee Eun-joo [email@example.com]
By Lee Eun-joo
More in Economy
Central bank holds rates steady, adjusts up GDP forecast
Restaurant coupons to make a comeback as an app
[INTERVIEW] Korea Forest Service head sees huge opportunity in Indonesia
Tapped out and hunkered down, Korea stares recession in the face
Property owners get big tax shock