KODIT to Issue 140 Billion Won Worth of G-ABSs to Support Green Financing for SMEs in 1st Half

Chairman Choi Won-mok of Korea Credit Guarantee Fund (KODIT). (Photo: KODIT)

Korea Credit Guarantee Fund (KODIT) announced that it plans to issue a total of 140 billion won worth of green asset-backed securities (G-ABSs) in the first half of this year to support green financing for small and medium-sized enterprises (SMEs).

G-ABSs are securitized securities issued by incorporating corporate bonds of small and medium-sized enterprises that meet the Korean Green Classification System (K-Taxonomy) as underlying assets.

They were first introduced in Korea in May 2023 by KODIT in cooperation with the Ministry of Environment and the Korea Environmental Industry & Technology Institute.

In 2024, a total of 256.6 billion won worth of G-ABSs were issued. A total of 110 SMEs received financial support thanks to G-ABSs. The amount of the support reached approximately 9.2 billion won.

In particular, from this year, the secondary protection support period of the Korea Institute of Environmental Technology has been extended to three years from one year.

In the first year, the support will cover 3 percentage points for SMEs and 2 percent for mid-sized companies, and in the second and third years, additional support is provided within 50 percent of the first year’s support amount.

In addition, KODIT will further ease the burden on enterprises by lowering its three-year refinancing rate by 0.2 percentage points.

KODIT is planning to issue a total of 140 billion won worth of G-ABSs in the first half of this year. After issuing 50.5 billion won worth of G-ABSs for the first time in 2025 on March 28, it will issue the remaining amount worth of G-ABSs in April and May.

Small and medium-sized enterprises wishing to participate in G-ABS issuance can apply through the websites of the Ministry of Environment and the Korea Environmental Industry & Technology Institute or KODIT’s nationwide sales offices by April 9.

Paying 90% of Receivables Insurance Premiums for SMEs

Gwangmyeong City near Seoul will pay receivables insurance premiums for SMEs with sales of less than 50 billion won in all industries to fuel the growth of SMEs with KODIT.

The city government announced on March 31 that it has signed an agreement with KODIT in January this year to promote the 2025 Accounts Receivable Insurance Premium Project which pays insurance premiums in the event of losses from credit transactions.

Accounts receivable insurance is a public insurance system that covers up to 80 percent of losses incurred when a company sells goods or services on credit and is unable to collect payment due to the insolvency or default of the buyer.

In particular, this year, the eligibility criteria for the program was expanded from the manufacturing and retail sectors with sales of 30 billion won or less last year to small and medium-sized enterprises in all industries with sales of less than 50 billion won in order to prevent serial bankruptcies.

Under the agreement, KODIT applies a preferential discount rate of 10 percent to premiums for accounts receivable insurance with Gyeonggi Province contributing 50 percent (up to 2 million won) and Gwangmyeong City contributing 20 percent (up to 2 million won) of calculated premiums.

Guaranteeing 16.5 Billion Won for Samsung Display’s OLED Exports

KODIT announced that it will provide a joint overseas export project guarantee worth 16.5 billion won to eight partner companies participating in Samsung Display’s project to produce and export panels for premium class small and medium-sized organic light emitting diode and OLED display.

The joint overseas export project guarantee, the first of its kind in 2025, will provide guarantees to participating partner companies by evaluating their business viability on a new industry export project basis rather than the current company-by-company basis.

The project aims to help Samsung Display and its small and medium-sized partner companies expand exports by advancing OLED technology and streamlining production.

The new program will provide participating companies with preferential benefits of a guarantee ratio of 90 percent and a fixed guarantee fee rate of 0.8 percent, while loan interest rates will be cut by up to 1.5 percentage points.