KDB tries to lend more to creatorsForeign customers and young customers of Korea Exchange Bank pose Thursday in front of Geunjeongjeon, the main hall of the Gyeongbok Palace, during a night tour hosted by the bank to give its foreign and student customers an opportunity to experience Korea’s traditional culture and history. Provided by the company
To help support President Park Geun-hye’s “creative economy” campaign, the state-run Korea Development Bank (KDB) said last week that it has created a fund to lend to small start-ups that will use their ideas - their intellectual property - as collateral.
The fund, called the R&D-Biz Creation Fund, has been created with the Korean Intellectual Property Office and the Korea Finance Corporation to give a foundation to its “techno-banking” service introduced last year.
According to KDB, more than 4 billion won ($3.76 million) will be invested in the joint fund to use intellectual properties as collateral for loans. Although in other advanced countries like the United States, where loans secured against intangible assets like intellectual properties are common, Korean financial institutions have preferred tangible assets for collateral.
As a result, small and midsize companies have complained that they have trouble getting loans even though they have competitive business plans. The Park administration has been trying to dismantle financial barriers faced by SMEs - and particularly start-up companies - to help them thrive and boost the more creative side of Korea’s economy.
“[Through the fund], we have created a foundation to be able to expand loans given on intellectual properties and opportunities to provide practical support to companies that own outstanding intellectual properties,” said Kim Yoon-tae, vice president of KDB’s investment finance division.
So far, KDB has lent 6.7 billion won to five local companies using their intellectual properties as collateral for the first time. The five companies are mainly software companies that develop user interface solutions for corporations.
Meanwhile, KDB’s techno-banking service aims to start a virtuous cycle in the country’s technical ecosystem by providing financial services to companies with high-quality technologies and helping them prosper and lead to other companies succeeding. The program offers services that allow companies to exchange technologies they hold and consult with companies that could commercialize their techniques.
According to KDB, it has provided 122 billion won worth of funds to companies via its techno-banking service as of September, and it plans to provide 150 billion won worth of funds in total this year.
BY LEE EUN-JOO [email@example.com]