KONEX Market
KONEX (Korea New Exchange) is a new market established in 2013 for small- and medium-sized enterprises exclusively in order to form the basis of creative economy by reinforcing support through the capital market for SMEs at the early stage.
Background of Establishing the KONEX

Considering the fact that most of SMEs lean too much towards bank loans, and thus the rate of funding through direct financing (stock issuance) is extremely low. This led to higher debt ratio of unlisted corporations, particularly SMEs, to heavier burden of the interest payment compared to the listed corporations, and to the possibility that the existence of the corporation may be threatened with the change of loan policy of banks.

< Financing Sources of SMEs in 2011 >
  Bank Loans Policy Capital Non-banking Financial Institutions Stocks Corporate Bonds Private loans Foreign Loans
Portions 83.3% 10.6% 0.9% 1.1% 3.2% 0.4% 0.6%

The reason why financing capital of SMEs has too much centered to bank loans may be found in that the KOSDAQ market and the Free Board (predecessor of K-OTC) have not functioned successfully in supporting SMEs.

In the case of the KOSDAQ market, it became the market where the early SMEs can hardly enter as it turned into the market only for the matured SMEs due to the continuous reinforcement of the listing criteria to protect investors. The average time from establishment to listing on KOSDAQ of corporations has significantly increased from 9.3 years in 2004 to 13.3 years in 2011. In addition, the function of Free Board as a financing channel for SMEs has been deteriorated owing to the weak trading performance, raising the need for a new market to support startups and other SMEs.


Against this backdrop, in 2013, KRX has established KONEX, as a market optimized for the early-stage SMEs.