Challenges and Policy Recommendations for Public Institutions’ Win-Win Cooperation Programs

 

Published on May 8, 2026
Published by Public Institution Evaluation Division



 

   As the Korean economy faces a widening structural gap in competitiveness between large enterprises and small and medium-sized enterprises (SMEs), the government has shifted its focus beyond enterprise-specific aid toward win-win cooperation. The Loan for Mutual Growth and Cooperation and the Win-Win Cooperation Fund Between Large Enterprises and SMEs (hereinafter, the “Win-Win Cooperation Fund”) are key policy instruments for promoting such cooperation in practice, and public institutions play an important role in implementing these initiatives.
   In this context, this report comprehensively reviews the current status of the contribution programs of the Loan for Mutual Growth and Cooperation and the Win-Win Cooperation Fund, with a focus on public institutions, and examines operational issues and limitations that reduce their effectiveness in order to derive policy implications.
   With respect to the Loan for Mutual Growth and Cooperation, first, the program should place greater emphasis on supporting partner firms. Although the program was originally designed to support firms partnering with public institutions, the share of partner firms directly recommended by public institutions stood at only 42.1% in 2025, while for some institutions the figure was below 30% or nonexistent, significantly weakening alignment with the program’s policy objective. Thus, public institutions need to take a more active role in selecting beneficiary firms to expand support for partner firms.
   Second, the management system for preventing overlapping support should be strengthened. As of 2024, there were 566 cases in which a single firm received support from two or more public institutions, including cases in which support was provided by up to six institutions. This underscores the need for stronger coordination among public institutions, including information-sharing on beneficiary firms, to prevent overlapping support.
   Third, loan periods and lending limits should be clearly specified. Since 47.6% of all agreements do not specify loan periods, support has become concentrated among certain firms, with 38.8% of firms receiving support for more than three years and 21.7% for more than four years. Accordingly, agreements should clearly stipulate loan periods and lending limits, while also strengthening monitoring and management both before and after support is provided.
   Fourth, the operational structure should be improved to enhance loan disbursement. Among the 11 agreements with the highest non-disbursement rates, the share of undisbursed loans rose from 68.4% in 2024 to 70.2% in 2025, suggesting that a substantial portion of deposited funds remained unused at financial institutions, thereby reducing the program’s effectiveness. This points to the need to set loan limits and deposit amounts at appropriate levels, along with operational improvements to enhance loan disbursement.
   Fifth, the method of interest settlement should be improved. Under the simple cumulative method currently used in many agreements, the interest income of public institutions has been underestimated, and in some cases interest has been recorded as zero despite the existence of undisbursed funds. An interest settlement method based on average balances that reflects the timing of loan disbursements and repayments should therefore be adopted, together with mandatory prior review of the calculation method when agreements are concluded.
   Sixth, the public role of the Industrial Bank of Korea (IBK) as a partner bank should be strengthened. Given the shortcomings in expanding win-win cooperation, managing overlapping support, and improving interest settlement practices, IBK’s operational approach across the program should be reviewed to strengthen its role as a policy finance institution.
   Turning to the contribution programs of the Win-Win Cooperation Fund, first, the Benefit Sharing Program’s effectiveness should be enhanced. A number of cases were identified in which public institutions operated the program in ways inconsistent with its intended purpose, including recognizing routine contract performance as an achievement or setting targets based on the subjective assessments of internal staff. Thus, public institutions need to make greater efforts to generate meaningful outcomes, while the Benefit Sharing Promotion Group should more thoroughly carry out its responsibilities related to registration, review, and verification.
   Second, the range of beneficiaries should be broadened. Overlapping support both among Win-Win Cooperation Fund programs and between those programs and Loan for Mutual Growth and Cooperation programs raises concerns about the concentration of policy resources and fairness in support allocation. This highlights the need for better management of overlapping support and institutional improvements to attract new participating firms.
   Third, private autonomous planning programs should shift from short-term support toward sustainable growth. Since a large share of program funding is concentrated in one-time welfare support for workers, support should be expanded into areas that can strengthen the sustainable growth of SMEs, while institutions should more actively develop and identify programs that reflect their areas of expertise.
   Fourth, the evaluation indicators for Win-Win Cooperation Fund programs should be improved. Since the current indicators are focused mainly on quantitative performance, such as the number of support cases and amount of support provided, they do not adequately reflect actual outcomes or improvements in business competitiveness. Thus, evaluation indicators should be revised to better reflect the characteristics and performance of each program.
   Fifth, the purpose of support policies for SME workers should be taken into account. When the fund covers the corporate share of programs such as the Youth Tomorrow Deduction and Worker Vacation Support programs, there is a risk that corporate responsibility may be weakened. This highlights the need to improve support levels and eligibility criteria so that the programs operate in line with their original policy objectives.