SEOUL, Jun. 5 (Korea Bizwire) — The government plans to soften rules for crowdfunding to help small- and medium-sized enterprises (SMEs) raise money from individual investors, the head of the financial regulator said Tuesday.
Currently, only venture startups are allowed to raise funds through crowdfunding, which enables them to get capital from a large number of small investors, typically via the Internet and social media.
The government will submit a bill to allow SMEs to secure funding via crowdfunding, said Choi Jong-ku, chairman of the Financial Services Commission (FSC).
Regulations on brokers of crowdfunding will be eased to promote equity crowdfunding campaigns, Choi said.
“Financial authorities will actively improve regulations to help crowdfunding serve as a stable fund-raising market for venture startups and SMEs,” Choi said.
Choi made the remarks at a meeting to mark the launch of a crowdfunding industry association.
South Korea adopted the equity-style crowdfunding program in 2016 and the value of crowdfunding soared about 60 percent last year.
Last year, 183 companies raised a combined 27.8 billion won (US$25.9 million), up 59.7 percent from a year earlier.
In the first five months of this year, crowdfunding drew 60 billion won from some 30,000 individual investors, according to the FSC.