Export-Import Bank of Korea signs MOU with defense industry association to boost arms exports

The Export-Import Bank of Korea signed a memorandum of understanding with the Korea Defense Industry Association to boost defense exports, the bank announced Wednesday.

The two organizations signed the MOU on Tuesday at the association's office in Mapo-gu, Seoul, under the title "defense industry mutual cooperation and export promotion for small and medium-sized enterprises."

Under the agreement, the two institutions will cooperate across several areas: exploring ways to foster mutual growth between large defense companies and small and medium-sized enterprises, providing financial support to help smaller firms strengthen their export competitiveness, and exchanging information for the mutual development of both organizations.

The MOU was drawn up in support of the government's national policy goal of making South Korea one of the world's top four defense exporters and to expand mutual cooperation. Its primary objectives are to build a healthy industrial ecosystem in which large and small defense companies can grow together and to promote exports by smaller firms.

In April, the bank signed defense cooperation agreements with five of South Korea's leading defense companies, and in August it provided 120 billion won ($89.3 million) in financing — the first of its kind — to cover payment settlements for small and mid-sized partner firms. Last month, it signed a re-lending finance agreement worth $100 million with Mexico's foreign trade development bank.

"Through this MOU, the bank will actively leverage its specialized financial capabilities to help small and medium-sized enterprises build their export capacity, while at the same time contributing to South Korea's goal of joining the world's top four defense exporters," Export-Import Bank of Korea President Hwang Ki-yeon said.