500 Billion KRW Support for Early Cash Conversion Guarantee of Export Receivables... "Providing Liquidity to Export Companies"

Resolution of Export Contract Cancellations and Payment Delays Due to COVID-19

[Image source=Yonhap News]

[Asia Economy Reporter Moon Chaeseok] The government announced that it will inject an additional 500 billion KRW to help small and medium-sized export companies and mid-sized enterprises convert export receivables into cash early.

On the 18th, the Ministry of Trade, Industry and Energy stated that companies are facing difficulties such as export contract cancellations and delayed payments due to the worsening external environment caused by the spread of the novel coronavirus infection (COVID-19).

This is a method where the Korea Trade Insurance Corporation guarantees so that exporters can convert receivables received after sending goods to importers into cash early through commercial banks. An additional 50 billion KRW was reflected in this supplementary budget.

The government expects that as COVID-19 spreads globally as a pandemic, major countries' stock market indices and international oil prices have sharply declined, making the future global economy and international trade more challenging.

According to the Ministry of Trade, Industry and Energy, early cash conversion of export receivables allows companies to recover payments regardless of the importer's bankruptcy, and even if payments are delayed, banks can immediately convert receivables into cash, enabling companies to prepare for the next export.

An official from the Ministry said, "By supporting 500 billion KRW of trade finance with the supplementary budget, an export inducement effect of 1.2 trillion KRW in total can be achieved."

This content was produced with the assistance of AI translation services.