LOCAL FINANCE ASSOCIATION
Local Finance Association (LOFA), which was established in 1964 by local governments nationwide, is fulfilling its role as a leading financial aid provider for local government in Korea. Although challenges are continuing in the form of large-scale disasters caused by climate change and fierce competition against insurers in the private sector, LOFA is striving to turn such challenges into opportunities and further expand the scope of its business so as to better suit the needs of its members.
The oldest one of its mutual aid businesses is that for disaster recovery. When disasters occur at buildings and facilities owned, used or managed by local governments, LOFA grants repair subsidies so that local governments can stabilize their financial conditions. Member fees (insurance premium) are approximately 35% cheaper on average than those imposed by private-sector property insurance companies, while the coverage ranges from damage by fire, storm, snow and floods to the collapse of old buildings, explosions and damage done to public properties due to terrorism activities. For example, it granted more than 20 billion won to public properties affected by the typhoons Bolaven and Taenvin last year, thereby greatly reducing the financial burdens of local governments.
At the same time, LOFA has introduced damage compensation for local governments so that they can benefit when mistakes are inadvertently made during the establishment and management of public structures and works. The average member fee is roughly 20% cheaper, with mutual aid benefits available even in cases rejected by property insurers in the private sector.
More recently, LOFA entered the administrative indemnity business in January this year. The purpose is to pay reparations in the event of damage incurred by administrative action between a local government and a civil petitioner. This is regarded as one of the most effective forms of compensation for damage attributed to mistakes on the part of local governments. In particular, the financial resources accumulated by such businesses have been offered to members suffering from natural disasters. For instance, seven local governments, including Icheon City in Gyeonggi Province and Inje County in Gangwon Province, were designated as special disaster zones in July this year due to heavy rain and received approximately 200 million won for disaster recovery purposes. Furthermore, LOFA has provided members with inspection costs for accident prevention regarding public facilities and training expenses for public officials in charge of common property management, as well as publishing books and holding seminars on local finance so as to increase awareness of the sector and expedite its growth.
In the meantime, it established the Out of Home Advertising Center five years ago in order to raise funds for international events such as the Yeosu Expo and the Asian Games in Incheon City. Its Signboard Reform business has been well received by local residents in Sejong City and many other new towns, and serves to develop unique shop signs that reflect local characters. The center is working together with not just other related authorities including the Ministry of Security and Public Administration, but also Sign Frontier (civil monitoring groups) so as to promote the participation of citizens. The groups select the most beautiful signboards each month so that more and more people can become aware of the importance of good-looking advertising signs. “We’ll keep striving to better the out of home advertising environment and provide related consulting in order to play a crucial role in the development of the sector,” said LOFA CEO Kim Hong-gab, adding, “The Out of Home Advertising Center, which is a supporting agency dedicated to the cause, will make tireless efforts for this goal.”
LOFA, which celebrates its 50th anniversary next year, renewed its corporate identity in February 2012, when the incumbent CEO took office. In June this year, it held a vision declaration ceremony along with an event for the rationalization of management and ethical management. At the event, its executive and staff members proclaimed the LOFA Way of customer-focused, accountability, trust, passion and professionalism.
In addition, it announced that it would reach 1.09 trillion won in net asset reserves by 2016, record at least 200 billion won in out of home advertising profits, offer 42 billion won in assistance to its members and be selected as the best organization in the national management performance evaluation. To this end, LOFA has overhauled its cooperation schemes for disaster restoration, established a new framework for communication and collaboration and reformed its organizational management and customer support systems.
The CEO is also famous for on-site efforts, making decisions based on what he sees and hears on such visits. He has frequently visited local government members since the inauguration in order to better grasp their needs and set a better direction for them. He himself has also spearheaded the promotion of the administrative indemnity businesses this year, meeting and giving detailed explanations to public officials around the country.
LOFA has been involved in a variety of social contribution activities since 2009 after the introduction of the chief culture officer (CCO) position; a first for a public institution in Korea. One of the most well-known examples is the volunteer activities in Wonpyeong Village, located in Chuncheon City, Gangwon Province and at senior welfare centers in Mapo-gu, Seoul City, both of which began three years ago.
During the past years, LOFA has visited the village to help locals with their work and purchased agricultural goods produced by them. It also installed large-sized LED signboards at the Farm Stay Center last year in order to increase awareness of the village as a tourist destination. In the community centers for senior citizens in Mapo-gu, its executive and staff members, five to seven at a time, have taken turns to deliver lunch boxes, clean kitchens and dining rooms, and distribute meals, etc.
In addition, they delivered coal briquettes in 2010 to Baeksa Village situated in Nowongu, Seoul, visited single and elderly households during the 2011 Christmas season, and held community chest campaigns in 2012, etc. They have also donated daily necessities, such as refrigerators and washing machines this year to those living in shanty towns.
“We promise that we’ll continue with our volunteer activities down the road so as to fulfill our corporate social responsibility and remain a reliable financial partner for our members,” the CEO stated, adding, “I believe that such endeavors will contribute to the creation of a society where all people are valued.”