FSC pledges to help entertainment companiesThe Financial Services Commission (FSC) will funnel 5.5 trillion won ($4.45 billion) into smaller companies producing entertainment content, including video games, TV series and movies, this year.
The financial regulator unveiled its new financing plan focused on entertainment content producers on Friday. It promised to push local financiers to expand investment in entertainment companies by creating a way for investors to more accurately assess the strength of their business models.
“The state-run financial institutions will develop a system in which the credit worthiness of entertainment content businesses is not evaluated by the same standard applied to manufacturers,” FSC Chairman Yim Jong-yong said at a conference with the Ministry of Culture, Sports and Tourism and the Korea Creative Content Agency (KCCA) held in central Seoul on Friday. “So far, financiers only invested in businesses that have substantial guarantee.”
Yim vowed that he will change such practices, saying that entertainment content can be a cash cow for the nation through convergence with the manufacturing or service industries.
Of the 5.5 trillion won in assistance, five policy banks and financiers, including the Industrial Bank of Korea (IBK), Korea Development Bank and Korea Credit Guarantee Fund, will together supply 2.2 trillion won in loans, 3.1 trillion won in guarantees and 0.2 trillion won in investment.
The funds are hoped to double the current financial support to businesses that draw animations and develop new cartoon characters, both sectors estimated to have high growth potential.
The animation and character development sectors are estimated to grow by 7.6 percent and 11.4 percent this year, respectively, compared to the entertainment industry’s average growth of 5.7 percent, according to the KCCA.
The IBK will form a 10 billion won fund by the first half of this year to support video graphic developers who support their work via crowdfunding. The fund will give developers an additional 15 percent of what they raise to facilitate their success.
BY KIM JI-YOON [firstname.lastname@example.org]
with the Korea JoongAng Daily
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