NH Nonghyup Bank's Lee Young-woo: Leading Productive and Inclusive Finance

NH Nonghyup Bank houses a unique organization not commonly found in regular commercial banks. The 'Agriculture and Public Finance Division' distinctly embodies the bank's identity, connecting farmers, rural communities, and local economies through financial services.

This division includes the Agricultural Finance Department, which manages agricultural policy funds; the Agricultural Food Growth Investment Team, which invests in agricultural ventures; the Public Finance Department, responsible for municipal treasury operations; and the Loss Compensation Fund Department, which supports farmers' financial recovery.

Leading this organization since this year, Deputy Governor Lee Young-woo emphasized in a recent interview at the bank's headquarters in Jung-gu, Seoul, that the Agriculture and Public Finance Division stands at the forefront of the government's demands for 'productive finance' and 'inclusive finance.' He stated, "We will strengthen NH Nonghyup Bank's unique capabilities that other commercial banks cannot easily replicate, aiming to actively support national policies that promote regional coexistence as a public finance specialist bank."

Below is a Q&A with Deputy Governor Lee.

"The Agriculture and Public Finance Division best represents NH Nonghyup Bank's identity. Agricultural finance plays a productive role by supporting agricultural policy funds and nurturing agricultural food companies, aiding the sustainable growth of farmers and agricultural enterprises. A prime example is the comprehensive smart farm funding. We provide necessary funds to address agricultural issues such as stabilizing agricultural product prices and improving farmers' incomes. Recently, we introduced a 'No-Visit Loan Service for Successor Farmers' to allow young farmers to receive financial support without visiting a branch."

"We are enhancing our inclusive finance initiatives while continuing various social contribution activities in the community. We support economic recovery for farmers facing financial difficulties through debt relief and proactive debt cancellation. By the end of last year, we had provided debt relief for 21,789 cases (59.9 billion won). Through debt cancellation, 74,974 individuals benefited from a total of 658.4 billion won. We are also actively supporting the government's hometown love donation system, which has raised 30.45 billion won through 2.69 million donations to prevent rural extinction and revitalize local economies by last year."

"The Loss Compensation Fund was established to facilitate smooth agricultural, forestry, and fishery policy financing and to enhance the soundness of agricultural cooperatives, fisheries cooperatives, and forestry cooperatives. It also supports financial recovery for agricultural, forestry, and fishery workers. Its significance lies in being a unique system exclusive to NH Nonghyup Bank. The fund operates separately from the bank's accounting as a non-profit initiative. To date, the total losses compensated to agricultural, forestry, and fisheries cooperatives have exceeded 800 billion won. We actively support various financial recovery programs for agricultural, forestry, and fishery workers struggling with loan repayments, aligning with the government's emphasis on inclusive finance policies."

"NH Nonghyup Bank manages specialized venture capital funds that invest in agricultural food sectors based on companies' technological capabilities and growth potential rather than collateral. Currently, we manage 344.1 billion won across eight funds and were selected as the sole operator of the agricultural food fund in November last year, a first in the banking sector. The strategy has two key components: First, we boldly supply funds through equity investments in promising innovative companies. We also utilize our post-investment management system to support companies throughout their lifecycle, including preparing for IPOs and providing management consulting. Secondly, we actively pursue equity investments in early-stage agricultural food companies that struggle to secure bank loans due to weak financial structures. This approach aims to practice inclusive finance that supports the independence and growth of underserved companies. We plan to establish additional funds to support the integration of advanced technologies like physical AI and robotics with agriculture, enhancing the bridge for innovative technologies from other industries into agriculture."

"Smart farms have become a representative keyword symbolizing the future of agriculture. NH Nonghyup Bank launched the comprehensive smart farm funding in February 2017 and has supported 680.7 billion won (235 cases) to farmers wishing to establish smart farms by the end of last year. The National Agricultural Cooperative Federation plans to increase the number of supply-type smart farms from about 1,600 last year to over 2,000 this year. In the long term, we aim to introduce a 'standard contract for smart farm construction.' Although smart farms are rapidly being adopted, farmers often face unfair contracts and fraud during the contracting process, which can cost millions. We will work closely with the government and related agencies to implement this standard contract to protect farmers."

"We will enhance our digital finance offerings, such as the no-visit loan service for agricultural policy funds, to strengthen our future competitiveness. We will also fulfill our role as a catalyst for agricultural and rural development through prompt support of agricultural policy funds. Additionally, we plan to activate education and consulting to help young farmers become key players in future agriculture. We aim to support stable farming establishment and income increase, contributing to the sustainable growth of rural areas. We will further enhance NH Nonghyup Bank's role in the venture capital market for agricultural food sectors. NH Nonghyup Bank holds a leading position in managing specialized agricultural food funds. We aim to achieve a target of managing over 800 billion won in specialized agricultural food funds by 2030, continuing bold financial support to foster world-class agricultural food companies in South Korea."