Korea is rebooting one of its most symbolic impact-investment programs. The Social Impact Fund, which saw its budget halted under the previous administration, is being reinstated as the new government signals stronger support for social-venture enterprises. The move could reshape how public and private capital engage in impact-driven innovation across Asia’s growing ESG investment landscape.

Government Restores Social Impact Fund to Back Venture-Driven Social Solutions

The Ministry of SMEs and Startups (MSS) announced on October 23, 2025 that it will resume Mother Fund contributions to the social-impact investment sector beginning next year.

The program, first launched in 2018, directed state-backed venture capital into social-venture companies — firms that pursue sustainable profits while tackling social problems. Consistent budget allocations under the Moon Jae-in government were halted during the Yoon Suk-yeol administration, which assigned zero funding to the fund in both 2023 and 2024.

Under Minister Han Seong-sook, the ministry now plans to reintroduce the investment track and strengthen overall support for social-venture companies. While the final contribution scale has yet to be confirmed, the decision marks a return of institutional capital to Korea’s social-impact ecosystem.

Policy Continuity and a Shift Toward Measurable Impact

The renewed push aligns with President Lee Jae-myung’s previously expressed interest in social entrepreneurship and inclusive growth. His administration is expected to re-emphasize the social-venture sector as a pillar of economic and community development.

The MSS roundtable, held at KT&G Sangsang Planet in Seongsu-dong, Seoul, served as both consultation and policy reset. Attendees included representatives of social-venture firms, investment companies, and supporting institutions, who raised proposals such as:

• Reinstating social-impact investment incentives;
• Updating social-venture classification standards to align with global ESG frameworks;
• Expanding region-linked social-venture clusters;
• Increasing R&D and financial-support access for scaling companies.

These discussions reflected growing emphasis on measurable impact evaluation — ensuring that companies addressing social problems can be assessed, benchmarked, and recognized.

From Value Recognition to Scale-Up Support

Speaking after the meeting, Minister Han Seong-sook told reporters:

“Participants suggested finding ways to give greater recognition to companies that create social value rather than focusing only on profit. To do that, we need measurable criteria and better evaluation methods for social-problem-solving impact.”

She also noted the maturing profile of the ecosystem:

“We are now seeing social-venture firms entering the scale-up phase. We discussed how policy should evolve to support these larger, fast-growing companies.”

Industry analysts suggest that the need for clear valuation frameworks and predictable funding channels, arguing that stronger public-sector engagement could attract global ESG investors seeking credible metrics and transparent governance.

Korea Repositions Itself in the Global Impact-Investment Landscape with Social Impact Fund Revival

The reinstatement of the Social Impact Fund signals a return to policy continuity in Korea’s impact-investment agenda. For global investors, it reopens a pathway to co-invest in government-aligned ESG ventures, particularly those linked to regional innovation and social problem-solving.

Korea’s social-venture ecosystem, once seen as a model for integrating social value with entrepreneurship, slowed amid budget freezes and shifting policy focus. Its revival now aligns with the government’s broader national venture strategies, encouraging startups to address social challenges through data and technology as the country pursues to become one of the top four global venture powerhouses.

The renewed emphasis could position Korea as a regional impact-capital hub, connecting international ESG investors with measurable, outcome-oriented social enterprises supported by stronger government engagement.

Turning Policy Revival into Sustainable Momentum

The reintroduction of the Social Impact Fund strongly signals Korea’s direction in inclusive entrepreneurship and responsible innovation. The challenge ahead lies in maintaining continuity — ensuring that annual allocations, transparent metrics, and cross-sector partnerships endure beyond political cycles.

If successful, Korea’s renewed commitment could serve as a blueprint for how governments and startups collaborate to scale social innovation — proving that economic growth and social value can reinforce each other in the next chapter of Asia’s impact-investment story.

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