Wellington Koo (顧立雄), chairman of the FSC (CNA file photo)

Taipei, Oct. 4 (CNA) Banks in Taiwan have lent much more than expected to industries under the government-initiated "5 plus 2" innovation development program aimed at upgrading Taiwan's industrial sector, according to the Financial Supervisory Commission (FSC).

In a written report submitted to the Legislative Yuan, Taiwan's financial regulator said outstanding loans to companies in the "5 plus 2" industries totaled NT$4.86 trillion (US$159 billion) at the end of August, up NT$401.6 billion from the end of September 2016.

The NT$401.6 billion was much higher than the goal of NT$180 billion in new loans to those sectors between October 2016 and December 2017 set by the FSC to support the industrial innovation plan.

The "5" industries prioritized under the program are the Internet of Things in an Asian Silicon Valley, smart machinery, biotechnology, green energy and national defense and the "2" other areas are the circular economy and new agriculture.

President Tsai Ing-wen (蔡英文) said in an interview with the CNA on Oct. 1 that the program is aimed at strengthening the country's entire industrial base and does not represent excessive government involvement in the economy.

"The government wants to take advantage of Taiwan's existing industrial foundation to help the country upgrade itself at a faster pace and become more competitive," Tsai said. "The government does not intend to tell businesses what to do or what not to do."

The FSC said many banks have been eager to lend financial support to these innovative industries once the commission encouraged them to do so, though government-invested banks have been more active in responding to the FSC's appeal.

Of the additional NT$401.6 billion in outstanding loans to the "5 plus 2" sectors from October 2016 to August 2017, roughly NT$288 billion, or 72 percent, was contributed by Taiwan's nine government-invested banks, including the country's largest lender, the Bank of Taiwan.

That brought their total share of the NT$4.86 trillion in outstanding loans in the seven areas to nearly 60 percent, according to the Ministry of Finance.

To further boost local innovative industries, the FSC said it will assist companies in these sectors to go public to raise more funds and will also try to encourage Taiwan's insurance sector to invest some of its ample funds in such companies.

The FSC said it is planning to ease rules for insurers to invest in investment funds aimed at these innovative industries. 

(By Tsai Yi-chu and Frances Huang) 
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