SK Group, the country’s third-largest conglomerate, said Tuesday it will invest 500 million won ($457,200) in a fund to support social enterprises as part of its corporate responsibility activities.
In January, the Ministry of Employment and Labor unveiled a plan for the fund, the first of its kind here, aiming to facilitate financing for social enterprises seeking to expand facilities, provide more jobs and conduct research and development.
The ministry plans to inject 2.5 billion into the 10-billion-won project and pull out the remainder from large businesses and securities firms. SK is the first participant.
“As a company in the lead in establishing, nurturing and supporting social enterprises, we made the decision to contribute to the creation of a healthy social enterprise ecosystem,” SK said in a statement.
Currently, there are 501 government-certified social enterprises in Korea, according to the ministry.
The fund will open the door to many firms that have had difficulties getting loans from financial institutions due to their weak security and fragile capital structure, officials said.
When the fund-raising is completed, an investment association will be launched to operate the fund, SK said.
“SK will spare no support and interest for the successful operation of the country’s first fund to prop up social enterprises,” said Nam Sang-kon, head of the group’s corporate contributions office.
SK became the first conglomerate to launch a social enterprise here in 2009. Through its Happy School and Agaya, the group has created more than 6,000 jobs over the last five years.
This year, it is looking to set up eight more of such firms and generate more jobs.
“Donation-type social responsibilities are now insufficient to work out diverse social issues that exist in society,” SK Group Chairman Chey Tae-won said earlier. “It would be more effective to adopt the social enterprise-model, utilizing our corporate mechanisms.”
By Shin Hyon-hee (email@example.com