Introduction to KODIT ACSIC 1 Table of Contents

Introduction to KODIT & ACSIC 1

Table of Contents I. Overview of KODIT II. Credit Guarantee Service of KODIT III. ACSIC at A Glance 2

Overview of KODIT • Not-for-profit corporation founded under the special law called the Korea Credit Guarantee Fund Act (1976) • Capital funds: USD 3. 7 billion (As of the end of 2006) • Outstanding guarantee: USD 29. 6 billion (’ 06) • No. of Guaranteed Companies : 203, 096 (’ 06) • No. of employees: 2, 139 (’ 06) 3

Mission Contribute to the balanced development of the national economy Facilitate financing of enterprises Stimulate sound credit transaction Credit guarantees for the liabilities of promising enterprises Efficient management of credit information 4

Framework of Supervision Fund Management Planning Operation Planning Governmental Contribution KODIT Ministry of Finance and Economy Ministry of Planning and Budget National Assembly 5 Small & Medium Business Admin

Table of Contents I. Overview of KODIT II. Credit Guarantee Service of KODIT III. ACSIC at A Glance 6

Framework Government Supervision Debtor SME Fee Credit Investigation Contribution Guarantor Credit Guarantee Creditor Financial KODIT Contribution Loan 7 Institutions

Approval Processes 1 st Step 2 nd Step Consultation Application 3 rd Step Credit Investigation 4 th Step 5 th Step Credit Evaluation Approval & Issuance of Credit Guarantee 8

Performance of KODIT (Unit : billion of KRW) 2003 Outstanding Guarantees (A) 2004 2005 2006 32, 734 33, 571 31, 099 29, 634 Subrogation (B) (B/A, %) 1, 743 (5. 3) 1, 711 (5. 1) 1, 358 (4. 4) 672 (2. 3) Capital Funds (C) 3, 370 3, 203 3, 166 3, 720 9. 7 10. 5 9. 8 8. 0 Leverage Ratio (A/C, times) 9

KODIT & Asian Financial Crisis • Introduced Special Guarantee Programs to cope with the financial crisis in 1997 üTotal 22 special guarantee programs ü 250, 130 cases / 30. 8 trillion KRW • Played a critical role in bailing Korea out of the financial crisis üRevived the financial market üActed as a social safety net 10

Credit Guarantee & Korean Economy • Supports SMEs’ financing promotes economic vitality by supporting SMEs, the driving force of economic growth • Contributes to building up a credit-based society focusing on intangible resources rather than collateral • Contributes to balanced growth of the economy eases the inequality ü Between SMEs and Les ü Among locals 11

Table of Contents I. Overview of KODIT II. Credit Guarantee Service of KODIT III. ACSIC at A Glance 12

ACSIC at A Glance • Asia Credit Supplementation Institution Confederation (ACSIC) • Formed in 1987 • To promote the development of credit supplementation system for small business through exchange of information, discussion and interchange of personnel among member institutions 13

Members of ACSIC • 16 institutions from 11 countries (including 2 observers) • Operates no permanent secretariat • Countries (No of member institutions) Indonesia (3), Japan (2), Korea (3), Malaysia (1), Nepal (1), Papua New Guinea (1), Philippines (1), Sri Lanka (1), Taiwan (1), Thailand (1), India (1) 14

ACSIC Conference • ACSIC Conference ü Held annually ü Hosted by member institutions on a rotating basis ü Consists of Summit meeting, Plenary session, etc. ü 20 th Conference held in Bali, Indonesia (5 Nov – 8 Nov) • Other Activities ü ACSIC Training Program ü Working-level Council between member institutions 15

Case of Japan • JASME ü Japan Finance Corporation for Small Business ü Provides insurance services to NFCGC • NFCGC ü National Federation of Credit Guarantee Corporations ü 52 Credit Guarantee Corporations nationwide ü Provide guarantees to SMEs in their municipalities ü No of Employees : 5, 778 ü Outstanding Guarantees : 246 billion USD (2006) 16

Summary • Characteristics of Asian Guarantee System A typical guarantee institution in Asian region ü Is established by the government ü Is founded by a special law ü Relies on guarantee fees from guaranteed companies and government subsidies ü Actively involves in the credit rating process 17

Thank You KODIT Public Relations Office International Affairs Team Tel : (82) 2 710 4324 Website : www. kodit. co. kr E-mail : yppark@kodit. co. kr 18