South Korean President questions loan access for SMEs rejected by tech fund

South Korean President Lee Jae-myung has raised a critical question regarding the financial support system for small and medium-sized enterprises (SMEs), specifically focusing on those rejected by the Korea Technology Finance Corporation (KOTEC).

"What should happen to small and medium-sized enterprises that fail the screening of the Korea Technology Finance Corporation? Where can these companies secure loans?" President Lee asked during a briefing by the Ministry of SMEs and Startups on August 4, 2026. This question has emerged as a central challenge for the nation's technology finance policy.

The core issue lies in balancing the demand for expanded financial support for SMEs with technological promise but lacking collateral, against the imperative to ensure the soundness and stability of policy financial institutions. The government is tasked with refining its support mechanisms to address this gap, ensuring that innovative businesses can access necessary funding.

The Ministry of SMEs and Startups is now grappling with how to create pathways for these excluded businesses. The goal is to foster innovation and growth within the SME sector while upholding the integrity and financial health of the institutions providing the loans. This involves re-evaluating screening processes and exploring alternative funding avenues for technologically capable but financially constrained companies.