The Ministry of Science and ICT announced a new loans and guarantees policy, worth $1 billion (1.3 trillion won) on Thursday. The new policy aims to promote the growth of businesses in the digital sector. It will support the domestic and international expansion of digital companies in South Korea.
According to Yonhap, a total of 695 billion won has been allocated for emerging digital sectors, including artificial intelligence, software, and cloud computing. Specifically, 530 billion won will be reserved for AI-led semiconductor companies, 66 billion won for digital media and content companies, and 20 billion won for quantum technology.
To implement the new loans and guarantees policy, the apex industrial capital and development bank Korea Development Bank, the finance-based service provider Korea Credit Guarantee Fund, and the Small and Medium Business Bank in South Korea will play a key role in facilitating the loan process. These institutions have a proven track record of providing funds to businesses with growth potential.
Ministry of Science and ICT’s Candidate Recommendation Process
The Ministry of Science and ICT has strengthened the connection between digital policy as well as fiscal business through a meticulous selection process. The ministry will recommend the candidate companies. The policy financial institutions will then conduct thorough reviews before they provide loans or guarantees.
During the review process, financial institutions will assess factors such as the companies’ innovation, R&D, and investment plans. It will also go through the availability of a skilled workforce, as well as infrastructure procurement and development abilities.
South Korea’s digital landscape is thriving and also continuously developing, positioning the nation as one of the most advanced nations. This strong digital foundation has facilitated the growth of various digital services. These services include smart banking, transfers, digital media and more.
Expert Market Research projects that the AI market in Korea will experience a growth rate of 14.5 percent. Over the past decade, Korea has witnessed the filing of nearly 6,000 AI-related patents. It highlights the booming demand for AI-led sectors.
The Korean government is also actively nurturing quantum technology, one of the most critical and emerging technologies. In January, the Ministry of Science and ICT launched the Korea Quantum Industry Center to support the quantum technology academia.
Last week, the Ministry of Science and ICT proposed new policy measures to promote next-generation digital products. Additionally, it also announced assistance for domestic companies engaged in the digital market.