Korea’s Financial Services Commission (FSC) plans to set up another 500 billion won (US$358.9 million) financial technology innovation fund to continue promoting the industry until 2027 to help startups that face difficulty obtaining financing because of high interest rates.
Its first such fund, for 513 billion won, has already invested 282.4 billion won in 85 local fintech startups from 2020 to 2023.
The FSC had held talks with industry stakeholders, including venture investors and fintech companies, to discuss how to promote fintech investment, the regulator says in a statement on April 9.
According to Vice Chairman Kim Soyoung, a second fund is important because continued high interest rates and economic uncertainties have driven down investments for startup businesses and the fintech industry globally.
“It is crucial to make policy efforts to revitalise the fintech industry and its investment ecosystem,” he says, adding that some big technology companies will contribute to the new fund. He did not give more details.
Kim also says the government should expand the innovation funds’ investments into promising fintech businesses, upgrade the financial regulatory sandbox programme, and support the overseas expansion of fintech companies.
Impactful Insights, an Irish business advisory firm, predicts Korea’s fintech market will grow at a 20.9% compound annual rate between 2024 and 2032.
