Korea Trade Insurance Corporation Provides 75 Billion Won to Kazakhstan State Bank... First 'On-Lending' Case
Low-Interest Funding Now Possible Through K-Sure’s Guarantee
Funds Exclusively Provided to Korean Companies
Establishment of 200 Million Euro Cooperation Framework with Development Bank of Kazakhstan
On September 16, Korea Trade Insurance Corporation announced that it has provided 48 million euros (approximately 75 billion won) in financial support to the Development Bank of Kazakhstan (DBK), in order to help Korean small and medium-sized enterprises enter the Kazakhstani market. This marks the first case of such support using the 'on-lending' method, where the corporation supplies funds to overseas financial institutions to help Korean companies secure local business loans.
An official from Korea Trade Insurance Corporation explained, "On-lending is a structure that allows banks in countries with lower credit ratings to raise funds at lower interest rates by improving their creditworthiness through our guarantees." The official added, "DBK, by securing low-interest funding from global banks via our guarantee, will re-lend these funds to Korean companies' local projects. This enables DBK to reduce its financial costs, while Korean companies will find it easier to secure local funding."
On the previous day, the corporation also signed a business agreement to support the expansion of Korean companies' presence in Kazakhstan during the 'Korea-Kazakhstan Business Roundtable', held in conjunction with the Kazakhstani President's visit to South Korea. Korea Trade Insurance Corporation and DBK plan to jointly identify projects involving Korean companies in Kazakhstan based on a financial cooperation framework worth up to 200 million euros, and will strengthen cooperation to ensure additional financial support can be provided quickly.
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Jang Youngjin, CEO of Korea Trade Insurance Corporation, stated, "This support is significant in that it has established a foundation for our companies' entry into the Central Asian market through the first introduction of the on-lending method." He added, "We will continue to expand cooperation with overseas local financial institutions and spare no effort in providing financial support to help our companies secure new business opportunities in emerging markets."
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