National Growth Fund to expand···Over five years, from 150 trillion→200 trillion won, adding investments in space and aviation - 경향신문

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Financial Services Commission Chairman Lee Eok-won answers a question from President Lee Jae Myung during a ministry briefing held at the Blue House State Guesthouse on the 15th. Blue House Press Photo Pool

The Lee Jae Myung administration’s advanced industry promotion fund, the ‘National Growth Fund’, will expand its total investment scale over five years from 150 trillion won to 200 trillion won and newly invest in the space and aviation industries. It will also establish an asset manager dedicated to investing in strategic technologies that can shape the future of the country, such as quantum computers. Support for finance targeting low- and middle-income households will also increase, including returning interest to borrowers who repay diligently.

The Financial Services Commission stated at a briefing at the Blue House on the 15th that it will expand the National Growth Fund’s annual operating scale from the current 30 trillion won to 40 trillion won. Accordingly, the cumulative supply over the next five years through 2030 will also increase from 150 trillion won to 200 trillion won.

Currently, 12 industries, including semiconductors, displays, artificial intelligence (AI), and biotechnology, are designated as eligible for the fund’s supply, and space and aviation will be newly added.

The fund’s share of ‘direct equity investment’ will also increase. Rather than a lending approach that provides money and collects interest, it will share risk directly with companies. The scale of direct investment, currently around 3 trillion won per year, will be expanded to 5 trillion won or more annually starting in 2027. In return, a ‘Risk Management Committee’ and a ‘Post-Management Committee’ at a level comparable to the National Pension Service are to be established in September.

A specialized manager for ultra-long-term, large-scale investment in future strategic technologies, ‘Korea Strategic Technology Partners (KSTP·tentative name)’, will also be established. Led by Korea Development Bank and jointly founded by private financial institutions including the five major financial holding groups, it aims to supply 1~2 trillion won per year for five years, up to a total of 10 trillion won. Although the likelihood of failure is high, the goal is to invest in cutting-edge technologies that, if successful, could reshape the future landscape, such as quantum supercomputers, ultra-reliable communications networks, and bio digital twins. Technologies with high foreign dependence, such as rare-earth magnets and refining technologies dominated by China, are also within scope.

More funds will flow to the regions as well. The amount allocated to regions from the National Growth Fund will increase from 12 trillion won per year to 16 trillion won. In addition, a 1 trillion won region-dedicated fund will be newly created. In the ‘Regional Supply Expansion Target System’, which increases non-capital area funding by policy finance institutions, the Export-Import Bank and the Credit Guarantee Fund will be added to the existing Korea Development Bank, Industrial Bank of Korea, Korea Credit Guarantee Fund, and Korea Technology Finance Corporation. The regional supply by these institutions will increase from 100 trillion won to 164 trillion won.

Support for low- and middle-income households will also be strengthened. The Sunshine Loan special guarantee, which enables bank loans with guarantees from the Korea Inclusive Finance Agency for people with low credit, will reduce the effective interest rate from 12.5% to 6.3% through an ‘interest payback’. Half of the interest will be returned to those who repay their debts faithfully. The related budget will be finalized in the second half of the year following deliberation in the National Assembly.

An ultra-long-term, low-interest loan that improves the existing illegal private lending prevention loan (two-year maturity, 1 million won) is also under review. One option is to provide small sums (1 million won) at an interest rate of 4.5% with a 10-year maturity, so that it can be used with repayments of only 10,000 won per month.

An official at the Financial Services Commission said, “However, if loans are provided online and non-face-to-face, there could be considerable moral hazard (moral laxity),” adding, “We will design it based on in-person screening to carefully check whether small amounts of funds are truly needed, verify actual need, and link it with welfare services.” A detailed review is expected to take place after the government budget bill for next year is finalized.

Tasks for ‘inclusive finance’ were also presented, including the introduction of a Chief Inclusion Finance Officer (CIFO) at financial institutions and the wholesale write-off by public financial institutions of long-overdue claims of 20 years or more.

The method for calculating the DSR (debt service ratio for total debt principal and interest) will also be adjusted. Currently, if income for this year has increased by 20% or more from the previous year, the average income of the most recent two years is applied when calculating the loan limit. The Financial Services Commission plans to consider extending this averaging period to three years when income surges by 30% or more due to bonuses and the like. This is because calculating the loan limit based only on the income in the year a bonus is received can inflate it beyond actual repayment capacity.

An official at the Financial Services Commission explained, “The aim is to smooth out income that temporarily spikes at a particular time so that repayment capacity is reflected accurately.”