Mubo Mobilizes All Support Measures for Export Companies

New Introduction of 'Emergency Export Stabilization Fund'... Extension of Short-term Export Insurance Limit Without Reduction

Lee In-ho, President of Korea Trade Insurance Corporation (left), and Jin Ok-dong, President of Shinhan Bank, signed a business agreement on the 10th at the headquarters of K-sure located in Jongno-gu, Seoul, to provide emergency liquidity support to overseas subsidiaries of small and medium-sized enterprises affected by the novel coronavirus disease (COVID-19), and are taking a commemorative photo.

[Asia Economy Reporter Kwangho Lee] Korea Trade Insurance Corporation (K-SURE) is launching comprehensive support measures to overcome the unprecedented crisis caused by the spread of the novel coronavirus infection (COVID-19). A K-SURE official stated on the 14th, "We recently held an emergency management task force meeting and decided to establish and implement 'Trade Insurance Full Support Guidelines to Minimize COVID-19 Damage.'"

The K-SURE Emergency Management Task Force was expanded and reorganized from the existing task force team (TFT) on the 20th of last month to respond to the emergency economic situation and consolidate company-wide capabilities. Led by President Inho Lee, all division heads participate to establish a trade insurance full support system that can mobilize all possible means.

The guidelines include various support measures targeting all export companies, such as ▲ enhancing export vitality by strengthening export companies' competitiveness ▲ expanding emergency liquidity for small and medium-sized enterprises (SMEs) and mid-sized companies ▲ easing trade insurance thresholds.

First, the focus is on boosting export vitality through extending the short-term export insurance limit without reduction, strengthening support for overseas project orders and new industry exports, and offering a 50% discount on insurance and guarantee fees. The short-term export insurance limits for key export markets such as the United States, China, and the European Union (EU) will be extended without reduction to help export companies maintain relationships with existing clients and protect market share.

Additionally, to enhance the competitiveness of Korean companies in overseas economic stimulus projects, mid- to long-term financing will be expanded, and a new 'New Industry Export Promotion Support Limit' will be provided to buyers engaged in the 12 new industries designated by the Ministry of Trade, Industry and Energy or in 5G-related industries, thereby broadening export opportunities.

Furthermore, to reduce the burden on export companies, the discount rate for short-term export insurance premiums will be increased from the existing maximum of 35% to 50%, and the export credit guarantee fee discount will be expanded from the existing maximum of 20% to 50%.

Along with this, to expand emergency liquidity for SMEs and mid-sized companies, a new emergency export stabilization fund will be introduced to quickly support up to 200 million KRW per company, and the maturity of export credit guarantees (pre-shipment) will be extended by one year without reduction. Also, the support scale for early cash conversion guarantees of export receivables will be increased from 500 billion KRW to 700 billion KRW this year to alleviate the problem of funds being tied up after shipment. Financial support will also be increased for SMEs and mid-sized companies that have entered overseas markets alongside large corporations, assisting in securing working capital through capital increases or direct borrowing by overseas subsidiaries.

To this end, K-SURE has signed a business agreement with Shinhan Bank for emergency liquidity support. Both institutions will jointly support working capital to ensure that local subsidiaries of SMEs and mid-sized companies that have entered overseas markets alongside large corporations do not halt overseas business activities due to temporary financial difficulties. When Shinhan Bank recommends SMEs and mid-sized companies needing operating funds for overseas subsidiaries by utilizing its global network, K-SURE will issue overseas business finance insurance policies that can be used as collateral for bank loans.

K-SURE plans to promptly implement support through non-face-to-face trade insurance services to provide urgent assistance to export companies currently facing difficulties, ensuring no inconvenience in use. The Emergency Management Task Force will share information in real time with all sales offices to avoid any confusion in support.

Earlier this month, to share the pain caused by the spread of COVID-19 and fulfill social responsibility, executives agreed to voluntarily return part of their salaries. All executives belonging to the Emergency Management Task Force recognized the severity of the situation and will donate up to 30% of their salaries (30% for full-time executives, 10% for division heads) starting this month to vulnerable groups.

President Lee said, "Although we have experience overcoming difficulties wisely whenever challenges arise, many analyses suggest that this is an unprecedented crisis where global supply chain disruptions and demand slowdowns occur simultaneously. It is an important moment to provide energy to struggling export companies to overcome the crisis while also seeking opportunities for Korea to leap forward again as a strong export nation. We will do our utmost to ensure thorough and swift support by pooling company-wide capabilities."

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