Korea Credit Guarantee Fund and Its Contribution to the Korean Economy

Figure 4Framework of credit insuranceTable 18Business performance of credit insurance(Unit : billion KRW)E. Infrastructure credit guaranteeIn January 1999, KODIT became the sole operator of the Korea Infrastructure CreditGuarantee Fund (KICGF), which was established in August 1994 and used to be operated by theKorea Development Bank, KOTEC, and KODIT. The objective of Infrastructure creditguarantee is to help private investment corporations obtain funds for infrastructure constructionprojects. In order to obtain infrastructure credit guarantee, the applicant is required to apply forthe guarantee and go through screening and investigation process. KODIT decides whether toaccept the application and draws up the possible amount of the credit guarantee. Reflectinglarge scales and low risks, the ceiling amount of this service for a single firm is KRW 100billion and guarantee fee ranges from 0.3% to 1.3% of the total guarantee amount. Theguarantee fee is calculated based on the project risk and the credit rating of the applicant.Outstanding infrastructure guarantee stood at 233 billion KRW for 11 projects in 2004 and 321billion KRW for 10 projects 2005.118