The Presidential Committee for the G20 Summit: SME Finance Challenge Award Ceremony

November 12, 2010
Release Date: 
November 12, 2010

Seoul, South Korea (November 12, 2010) At the Pittsburgh Summit, the G20 Leaders committed to launch the G20 SME Finance Challenge, a global competition to identify innovative new ideas from the private sector to maximize the flow of funds to SMEs and award the best proposals.

In Toronto, the Leaders of the G-20 launched the G20 SME Finance Challenge and committed to mobilizing funding for implementation of the winning proposals. The Leaders also agreed to announce the winning proposals at the Seoul Summit. Accordingly, the SME Finance Challenge Award ceremony was arranged on the margin of the G20 Seoul Summit as an event attended by the U.S., Canadian, and Korean Leaders, who are the Chairs of the Pittsburgh, Toronto, and Seoul Summits, respectively.

President Lee Myung-bak hosted the award ceremony on November 12 at the COEX Auditorium after the G20 Leaders’ Meeting. U.S. President Barak Obama Canadian Prime Minister Stephen Harper also attended the ceremony. President Lee, in his capacity as the current G20 Chair, congratulated the 14 winners of the Challenge and presented award certificates to the three “People’s Choice” winners at the Challenge and presented award certificates to the three “Peoples’ Choice” winners that garnered the most votes in an online competition. President Obama and Prime Minister Harper also delivered their congratulatory speeches.

The three People’s Choice winners are: (1) European Fund for Southeast Europe (“Sustainable local currency SME financing window”); (2) Peace Dividend Trust (“Factor Finance for Procurement”); (3) Medical Credit Fund (“Providing affordable loans and quality upgrades to private SMEs”).

For an overview of the G20 SME Finance Challenge and the three People’s Choice Winning proposals, please refer to the Annexes.

To scale up the winning proposals and to identify and support other innovative SME finance models, Korea, the U.S., Canada, and the Inter-American Development Bank (IDB) have agreed to launch an SME Finance Innovation Fund and committed a total of US $528 million* to support the Fund. Korea is expected to participate in the steering committee of the SME Finance Innovation Fund, through which Korea can gain more knowhow on diverse and innovative solutions to SME financing.

*The amounts of funding committed by each country/institution are as follows:
US: US $205 million ($5 million in a grant by the USAID and $200 million in co-financing1 through OPIC2).
Korea: US $101 million ($1 million in a grant by the government and $100 million in co-financing through the Korean Export Import Bank3).
Canada: US $20 million in a grant by the government.
IDB: US $202 million ($2 million in a grant and $200 million in other forms of financing)

  1. Co-financing: Investment or loan provided for projects which the SME Finance Innovation Fund invests in.
  2. OPIC (Overseas Private Investment Corporation) is a public corporation that provides financial supports for the U.S. private investments in developing countries. It will provide co-financing for projects in which the U.S. private sector participates.
  3. The actual amount of financing provided by KEXIM can differ from the amount committed since under Article 18 of the Korean Export Import Bank Act, KEXIM can invest only in projects where Korean enterprises participate.

Since many innovative SME finance solutions have emerged from the private sector through the Challenge and the winning proposals will be scaled up with support from the SME Finance Innovation Fund, it is expected that the SME Finance Challenge and the award ceremony attended by three G20 Leaders will significantly contribute to mobilizing more international support for closer cooperation between the public and private sectors to increase flow of funds to SMEs.