Accelerating Export Growth for SMEs and Mid-Sized Companies: Trade Finance Support Expanded to KRW 120 Trillion This Year, KRW 140 Trillion Next Year

Ministry Announces Expansion of Trade Finance Support for SMEs and Mid-Sized Companies
KRW 10 Trillion “Mutual Growth Trade Finance” Fund to Be Established within This Year
KRW 1 Trillion RG Support Planned for Small Shipbuilders Next Year

The government has announced a significant expansion of trade finance for small and medium-sized enterprises (SMEs) and mid-sized companies in order to support the achievement of record-high export performance. This year, the government will provide KRW 120 trillion in support, with plans to increase the amount to KRW 140 trillion next year.

On September 9, the Ministry of Trade, Industry and Energy held a meeting at Sunic System in Suwon, chaired by Trade Negotiations Head Park Jeongseong, bringing together representatives of exporting SMEs, mid-sized companies, and financial institutions. At this meeting, the ministry announced plans to expand trade finance support for SMEs and mid-sized exporters.

Containers are waiting to be loaded at Pyeongtaek Port, Gyeonggi Province. Photo by Jinhyung Kang

As of September 5, cumulative exports for this year reached USD 709.4 billion, already surpassing last year’s annual export performance. With annual exports of USD 1 trillion now within reach, the government will gradually increase the scale of trade finance support provided through the Korea Trade Insurance Corporation, from KRW 109 trillion last year to KRW 120 trillion this year, and KRW 140 trillion next year.

Until now, many SMEs have faced difficulties starting exports due to a lack of credit information on overseas clients or have struggled to maintain operations because they could not obtain sufficient guarantees despite export opportunities. To address these financial challenges, the ministry plans to implement measures such as: 1) a “1+3 Financial Support Package” to boost the liquidity of exporting companies; 2) free support services for export beginners; and 3) the introduction of a new trade finance system that enables not only insurance and guarantees but also direct investment.

The 1+3 Financial Support Package consists of expanded special guarantees and three main liquidity support programs. First, special guarantee supply—for companies unable to utilize regular guarantees due to capital erosion—will be expanded from KRW 300 billion this year to KRW 350 billion. Next year, this figure will increase to KRW 450 billion.

The three main liquidity support programs will also be implemented. The government will establish a KRW 10 trillion fund within this year, supported by contributions from large companies and banks, to provide trade finance for SME and mid-sized company partners. Additionally, the export growth finance guarantee limit, based on sales rather than export performance, will be more than doubled for companies with insufficient export records. In line with the recovery in the shipbuilding industry, advance payment refund guarantees (RG) for small shipbuilders will also be supplied—around KRW 1 trillion is planned for next year.

Tailored free support services will be provided to export beginner companies. These include five free overseas credit investigations and allowing companies with annual exports of less than USD 5 million to use short-term export insurance without the burden of premiums. The number of group insurance partner organizations will be increased from 78 to more than 85.

New support systems will also be introduced to respond to changes in trade finance demand. The government intends to amend the Trade Insurance Act within this year, allowing the Korea Trade Insurance Corporation to make direct investments in promising export-oriented SMEs and mid-sized companies or to purchase export receivables. This will enable companies to secure mid- to long-term growth capital and speed up the conversion of export receivables into cash. In addition, dedicated insurance products will be strengthened for new types of exports, such as subscription-based exports where services or goods are provided and monthly fees are charged.

Park stated, “SMEs and mid-sized exporters, which are expanding the reach of our exports, must not lose hard-earned export opportunities due to lack of capital. We will lower the barriers and accelerate support so that trade finance needed for everything from a company’s first export to their growth and advancement is provided in a timely manner, considering not only past export performance but also growth potential.”

This content was produced with the assistance of AI translation services.