The New Role of Guarantee Institutions in the Fourth Industrial Revolution and Era of Inclusive Growth

Emergence of the Fourth Industrial Revolution, and the need for inclusive growth and other changes in the environment, require innovation in Republic of Korea’s guarantee system. The Korea Credit Guarantee Fund, hereafter referred to as “KODIT”, has provided credit guarantee services in a variety of industries and companies to achieve the dual policy goals of industrial development and market stabilization. It has also served as a market safety net in the event of national crisis, including the Asian Financial Crisis in 1997 and the Global Financial Crisis in 2008, helping the Korean economy quickly overcome them. Based on these experiences and results, KODIT is now seeking to vary its role in this rapidly-changing economic and technological environment, from merely providing guarantee services for small- and medium-sized enterprises (SMEs) to implementing innovation in the enterprise-wide business structure with a view to creating an innovative ecosystem, building data banks and platforms, and spreading social values. This chapter contains KODIT activities and performance in terms of its efforts to play a new part in this changing environment. We expect that the cases presented in this chapter will provide effective policy implications for the facilitation of SME financing in Asia, where public policy financing is relatively more important than in advanced countries, where venture capital investments are widely adopted and used.