SEOUL, Apr. 4 (Korea Bizwire) — The government will increase its policy support for public financial institutions so they can make more social impact investments, officials said Wednesday.
Unlike charities or donations, so-called impact investments are aimed at offering funds to small companies or cooperatives for social causes that can generate financial returns.
Chairing a meeting for impact investing, Financial Services Commission (FSC) Chairman Choi Jong-ku said attracting private capital is the key to promoting such investment schemes.
Impact investing is still at an infant stage in South Korea, and the FSC has said it will set up a Social Benefit Fund worth 100 billion won (US$94.8 million) by the end of this year.
From July, the Korea Inclusive Finance Agency, a public financial institution for low-income people, will provide guarantees for loans worth 5 to 8 billion won for firms doing business for social issues, the FSC said in a statement.
Another state institution for small and medium-sized enterprises, the Small and Medium Business Corporation, has offered guarantees for loans worth 35 billion won for such firms since January, it said.