Korea Credit Guarantee Fund and Its Contribution to the Korean Economy

the number of department was reduced to 22 from 25, new strategic departments wereestablished, which are Innovation Strategy Office, Performance Evaluation Department,Business Development Office, and Industry Research Department. Branch offices wereregrouped under the business headquarter system to boost the local-based business, and thesenior directors of business headquarters were entrusted with the right of personnelmanagement. In addition, Hi-plus Teams were installed for a more efficient risk management.Hi-plus teams, which are responsible for the guarantees surpassing KRW 1 billion, specialize inlarge-sum guarantee.C. Personnel innovationPersonnel system focuses both on ability-oriented management and performance-orientedcompensation, which differs from a former seniority system. Organization will be groupedaccording to positions and duties, and the difference in remuneration according to employee’sperformance will be widened. Appraisals based on seniority system will be cut down, and eachemployee will be given rotational duties according to his ability and performance.VIII. ConclusionKODIT has experienced the ups and downs of the Korean economy since its establishmentin 1976. It provided credit guarantees for market stabilization at every economic crisis andserved as a driving force of the economic growth of Korea. The major contributions of KODITcan be summarized as follows. First, KODIT supported SMEs financing by guaranteeing theircredit. Credit guarantee alleviates the discrimination between SMEs and large enterprises in thefinancial market and enhances efficiency in the allocation of financial resources. Also bysupporting SMEs, the driving force of the future economy, it promotes economic vitality.Second, KODIT contributed to building up a credit-based society. Through its unique approvalprocess focusing on intangible resources of SMEs rather than its collateral, KODIT hasfacilitated credit-based commercial transaction and enhanced credit management ability ofenterprises. Third, KODIT contributed to balanced growth of the Korean economy. Bysupporting the financing of SMEs that lag behind large enterprises, it eases the inequalitybetween SMEs and large enterprises.The successful operation of KODIT of the last 30 years has become a benchmarking targetof countries around the world. During the first half year of 2006, KODIT introduced its credit124