SEOUL, Feb. 4 (Xinhua) -- Loans with movable assets as collateral grew in South Korea as small firms with low credit increased fundraising through such loans, the financial watchdog said Monday.
Movable asset-backed loans extended by banks were 348.5 billion won (320 million U.S. dollars) in 2012, topping the watchdog's initial target of 200 billion won, according to the Financial Supervisory Service (FSS).
The law, which allows firms to borrow money with movable assets as collateral, was implemented last year, with the first movable asset-backed loans launched on Aug. 8 last year. The watchdog set its 2013 target of such loans at 1.8 trillion won (1.65 billion dollars). "It will help small firms with difficulties in raising funds due to low credit," an official at the FSS said by phone. "Big corporations can borrow money through various ways such as corporate bond issuance, rights offering and credit loans."
Loans with tangible assets as collateral accounted for 38.1 percent of the total in 2012. Those for inventory assets and accounts receivable as security took up 37.8 percent and 21.5 percent respectively.
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