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SEOUL, May 22 (Yonhap) -- The government unveiled a plan Wednesday to set up a fund worth 6 trillion won (US$5.38 billion) to nurture venture companies and start-ups as part of a broader policy move to ramp up support for smaller businesses.
Under the plan, state-run policy lenders will provide 1.85 trillion won over the next three years, with the remaining 4.15 trillion won to be invested by private companies, according to the Financial Services Commission (FSC), the country's top financial regulator.
The fund will be raised through various types of investment vehicles including private equity funds and venture capital, with it set to be ready for launch by the third quarter of this year, the FSC said.
The plan came as the government has been focused on shoring up policy efforts in a bid to help smaller businesses grow, as pledged by President Park Geun-hye during her campaign.
Park has proposed what is dubbed the "creative economy," in which innovative technologies are developed and nurtured through adequate financing, leading to more job creation and enhanced productivity.
The plan is in line with growing calls in South Korea to narrow the gap between large and smaller companies under "economic democratization," a term echoed in the political sphere since the last presidential election.
The government expects the fund will be able to induce a production effect worth 5.5 trillion won, while creating some 27,000 fresh jobs.
The fund will also fuel more demand for initial public offerings (IPOs) and mergers and acquisitions (M