Sinbo Signs MOU on 'Trade Credit Insurance' with Busan City

Shinbo, 10% Discount on Insurance Premiums for SMEs Located in Busan
Busan City Contributes 200 Million KRW to Support 50% of the Final Calculated Insurance Premium

Yoon Dae-hee, Chairman of the Korea Credit Guarantee Fund

[Asia Economy Reporter Park Sun-mi] The Korea Credit Guarantee Fund (KODIT) announced on the 27th that it has signed a "Trade Credit Insurance Premium Support Agreement" with Busan Metropolitan City to prevent chain bankruptcies of small and medium-sized enterprises (SMEs) located in Busan and to support market expansion.

Through this agreement, KODIT will offer a 10% discount on insurance premiums, and Busan City will contribute 200 million KRW to KODIT to support 50% of the final calculated premium, up to a limit of 2.5 million KRW per company.

The support targets 450 SMEs located in Busan that operate in strategic industries selected by Busan City, including eco-friendly smart ships, port logistics, precision machinery, high-tech materials, autonomous vehicles, service platforms, and smart finance.

Trade credit insurance is a public insurance system operated by KODIT under the commission of the Ministry of SMEs and Startups. It guarantees the risk of credit transactions between companies. When an insured company sells goods or services on credit and fails to collect payment from the client, the insurance compensates up to 80% of the loss incurred.

KODIT initially planned to underwrite trade credit insurance worth 20 trillion KRW this year, the same as last year, but expanded the underwriting scale by 200 billion KRW to 20.2 trillion KRW to help SMEs overcome the crisis caused by the COVID-19 pandemic and stabilize the economy.

A KODIT official said, "We hope this agreement will help stabilize the management of SMEs, which have been increasingly struggling due to the recent resurgence of COVID-19, and contribute to the economic recovery of Busan City. Going forward, trade credit insurance will continue to serve as a reliable support for SMEs."

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