Commercial banks, internet banks, local governments, and credit guarantee agencies are spreading the 'special contribution agreement' nationwide. This new financial supply structure is not just about supporting small businesses, but also about filling the gaps in regional finance.
The special contribution agreement combines private finance and local government funds with guarantee functions. When banks and local governments contribute funds, the credit guarantee agency provides guarantees of various sizes based on this and the bank then executes the loans. By raising the guarantee ratio up to 100% and lowering the guarantee fee, financial accessibility is increased.
The spread of this agreement is rapid. Hana Bank plans to contribute 40 billion won to the regional credit guarantee foundation to provide a total of 600 billion won in financial support, with 150 billion won allocated to the Yeongnam region. Daegu City is also promoting a guarantee agreement with Hana, Shinhan, and Woori Banks for 775 billion won, while Jeju Island is expanding a 600 billion won special guarantee with commercial banks and Jeju Bank, spreading the regional cooperation model nationwide.
Internet banks are also joining this trend. Kakao Bank, K Bank, and Toss Bank are expanding agreements with local governments and credit guarantee agencies nationwide to support small business finance. With the integration of non-face-to-face services, the accessibility and efficiency of policy finance are also increasing.
Credit guarantee funds and regional credit guarantee foundations are policy finance institutions that provide guarantees for small businesses and SMEs with insufficient collateral to obtain loans. They improve the financial accessibility of companies with growth potential but lacking credit, providing support for management guidance and credit management. Particularly, special guarantees for small businesses have supported funding in economic downturns or crisis situations.
The background to this is the changing structure of regional finance. Regional banks are shrinking as the role becomes more centralized in the capital area, while cooperative financial institutions such as Shinhyup, Saemaul Credit Union, Nonghyup, and Suhyup have limitations in terms of capital and risk management. As regional fund supplies shrink, the financial accessibility of small businesses and SMEs is deteriorating.
The special contribution agreement operates as an alternative to fill these gaps.
Industry insiders stated, "Commercial banks and internet banks are essentially complementing regional finance by supplying financial support at the local level in combination with guarantee agencies," and "By providing funding to borrowers excluded from the financial market, they are contributing to the revitalization of the local economy."