Korea Technology Finance Corp. (KOTEC), a quasi-governmental agency under the Ministry of SMEs and Startups, is pushing to revamp its organizational framework through amendments to the Korea Technology Finance Corporation Act. The agency plans to diversify beyond its traditional guarantee services for technology companies into various new support businesses.
According to industry sources on the 3rd, KOTEC aims to submit the amendment bill within the first half of this year. Government-led legislation through the Ministry of SMEs and Startups is reportedly the most likely approach.
The overhaul centers on expanding business scope beyond existing technology guarantee services. Through the amendment, KOTEC plans to formally establish new business models including direct investment and technology trading, pursuing full-scale diversification. The strategy aims to transform the agency into a "comprehensive technology finance platform" capable of responding nimbly to Korea's rapidly changing SME and venture ecosystem.
Earlier this year, KOTEC Chairman Kim Jong-ho signaled organizational innovation in his New Year's address. He outlined visions including customized full-cycle support for SMEs and ventures, creating an open innovation ecosystem spanning domestic and international markets, and becoming a global technology finance hub.
The move is also seen as supporting the successful implementation of the "Third Venture Boom," a key policy agenda of the Lee Jae-myung administration. Currently, Article 28 of the KOTEC Act limits the agency's operations to technology guarantees, credit guarantees, and guarantee-linked investments. This has created significant legal constraints on expanding support services beyond guarantee operations.
Once the law is amended, KOTEC plans to establish a comprehensive support system covering venture capital financing, technology trading, and mergers and acquisitions among technology ventures. The agency particularly aims to strengthen M&A funding capabilities to actively support the government's core initiative of revitalizing the venture investment exit market.
KOTEC has recently launched a study on "Organizational Framework Reform" with external research institutions to facilitate the amendment process. Through this research, the agency will develop a draft legal amendment for establishing the new institutional framework. Plans also include establishing optimal operational approaches for both the fund and institution, considering government fiscal management methods, related laws, and fund business structures.
Industry analysts suggest KOTEC's legislative push may be groundwork for converting the agency into a public corporation. Currently, KOTEC operates as a quasi-governmental body managing national funds. A conversion to public corporation status would expand management autonomy and enable more flexible operations in overseas expansion and private sector partnerships.
Under the Act on the Management of Public Institutions, Korean public institutions are classified as public corporations or quasi-governmental agencies based on asset size and self-generated revenue ratios. KOTEC is currently classified as a fund-management quasi-governmental agency. Conversion to public corporation status requires self-generated revenue to exceed 85% of total revenue. According to the Ministry of Economy and Finance's 2025 Fund Retention Evaluation Report, KOTEC's self-generated revenue ratio stands at 103.7% of operating expenditures, demonstrating complete financial independence capable of autonomous operation without government support.
A KOTEC official said, "There are no concrete plans yet for conversion to a public corporation." The official added, "However, through this legal amendment and operational framework reform, we are exploring ways to ease constraints on our existing business operations."