Cheong Wa Dae urges banks to become 'partners' for small businesses, not just lenders

Cheong Wa Dae said Tuesday that Senior Secretary for Economic Growth Ha Jun-kyung presided over a review meeting with six major banks to assess progress on the mutual-growth finance index. "Financial institutions must now go beyond simply providing credit and become reliable partners that drive the growth of small and medium-sized enterprises and small business owners together," Ha said.

The meeting, held at the Korea Federation of Banks, was convened to review preparations for the mutual-growth finance index — set to be introduced in the second half of this year — and to seek the financial sector's cooperation for a smooth evaluation process. Participants included six banks — Kookmin Bank, Industrial Bank of Korea, Nonghyup Bank, Shinhan Bank, Woori Bank and Hana Bank — along with the Ministry of SMEs and Startups, the Financial Services Commission, the Council on Cooperation between Large and Small Enterprises, the Financial Supervisory Service and the Korea Federation of Banks.

In January, the government announced a strategy for mutual growth between large and small businesses, expanding the cooperative ecosystem beyond its traditional focus on manufacturing and construction to include finance, defense industries and online platforms. Cheong Wa Dae said the meeting carried significant meaning in reaffirming that the financial sector must move beyond its role as a simple capital provider and act as a "strategic partner" working alongside small and medium-sized enterprises and small business owners to improve their fundamentals and drive growth.

Cheong Wa Dae noted that the mutual-growth finance index — being introduced for the first time in the second half of this year by the Council on Cooperation between Large and Small Enterprises and the Financial Supervisory Service — "will become a new model that transforms the paradigm of mutual-growth cooperation in the financial sector." The index will comprehensively evaluate mutual-growth finance performance, mutual-growth cooperation performance and consumer satisfaction. Through the index, the government plans to encourage banks to meaningfully lower lending barriers and expand close support that drives business growth.

At the meeting, the six banks also shared the current status and plans for financial-sector mutual-growth cooperation, and discussed ways to ensure that their mutual-growth efforts translate into tangible growth for small and medium-sized enterprises and small business owners.

"This kind of effort by the banking sector will complete a virtuous cycle of mutual growth, feeding back into improved asset quality and profit generation for financial institutions," Ha said. "Through this, sustainable growth of our economy will be possible."