Kibo launches crackdown on illegal policy finance brokers, offers up to 600,000 won in rewards

Korea Technology Finance Corporation is launching a concentrated reporting period to root out illegal brokers who exploit the policy finance support process. The agency is raising the reward for tips to a maximum of 600,000 won ($443) and stepping up inspections and enforcement in cooperation with the Korean National Police Agency.

Kibo said it will run the "Concentrated Reporting Period for Third-Party Misconduct" from Wednesday through Dec. 8.

The initiative stems from discussions at the seventh meeting of the Ministry of SMEs and Startups' Third-Party Misconduct TF, held Thursday. Four policy finance institutions are participating jointly: Kibo, Korea SMEs and Startups Agency, the Korea Federation of Small and Medium Business, and the Korea Federation of Credit Guarantee Foundations.

Illegal broker activity in the policy finance sector has continued to surface this year. According to the Ministry of SMEs and Startups, 482 reports were filed with the illegal broker reporting center between Jan. 1 and June 19. Of those, 412 cases, or 85.5 percent, were complaints that policy finance institutions could handle internally, while 8 cases, or 1.7 percent, were referred to investigative authorities. Another 27 cases remain under investigation.

Common illegal schemes include impersonating government agencies by using official symbols without authorization to solicit policy loans, collecting upfront fees and then disappearing, and forging loan agreements and credit guarantee certificates.

The Ministry of SMEs and Startups ran its first concentrated reporting period for one month starting June 29, during which it raised the reward from 400,000 won to 600,000 won. The same reward level applies to the current reporting period.

Kibo plans to pay prompt small-sum rewards to tipsters who submit specific circumstances and credible evidence to the illegal broker reporting center. A voluntary disclosure immunity program will also be in place, under which companies that proactively report third-party misconduct will be reviewed for exemption from penalties.

Kibo also plans to streamline the guarantee application process by reducing the amount of information customers must enter directly, making it easier for those less familiar with digital platforms to apply.

"We will work closely with relevant agencies to create a fair and transparent financial support environment where businesses can access policy finance without improper interference from third parties," said Lee Jong-hyeok, executive vice president of Kibo.