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FSS chief-SME support

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(Globalpost/GlobalPost)

SEOUL, March 21 (Yonhap) -- South Korea's financial watchdog will push for exempting smaller companies from paying bond issuance fees in a bid to help boost their financing, its chief said Thursday.

The Financial Supervisory Service (FSS) is considering taking measures including exempting bond issuance fees and simplifying the procedure for posting regulatory filings, FSS Gov. Choi Soo-hyun told reporters.

His remarks came as the new government puts its top policy priority on helping small and medium enterprises (SMEs) grow. President Park Geun-hye has pledged to boost support for smaller firms, urging related authorities to draw up measures.

In line with Park's envisioned plan to bolster SME support, Choi noted that it has become more difficult for smaller firms to raise money amid the economic slowdown.

According to the FSS, smaller companies mostly depend on banks and policy lenders to secure liquidity. Latest data showed their direct financing via bond and stock sales made up only 2.3 percent and 0.2 percent, respectively, of all funds raised.

Choi said the FSS will make sure that banks meet their SME lending targets since it has recently been found that some foreign-owned banks and a few other local lenders have deliberately taken advantage of smaller businesses by cutting down the amount of loans or raising interest rates.

"We'll inspect banks' loan extension trends every month and will instruct them to meet demand from small and medium-sized firms," Choi said.

Banks have set aside a total of 30.8 trillion won (US$27.5 billion) for SME lending in 2013, up 5.1 percent from 29.3 trillion won the previous year, according to the FSS.

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