SME Export Payment Delinquency Rate Four Times Higher Than Large Corporations... K-SURE Publishes Big Data Report

Latin America, Middle East & Africa, Increased SME Transaction Risks
First Disclosure of Payment Trends by Country and Industry in Korea
Mubo: "First Achievement of the 'Digital New Deal'"

Source=Korea Trade Insurance Corporation

[Asia Economy Reporter Moon Chaeseok] The delinquency rate of export payments among small and medium-sized enterprises (SMEs) was found to be more than four times higher than that of large corporations.

Korea Trade Insurance Corporation (K-SURE) announced on the 18th that it will publish the "K-SURE Payment Data Report (Trade Transaction Payment Trend Report)" on the 19th, which contains payment trends of export payments in major overseas markets of South Korea.

K-SURE analyzed approximately 2.7 million big data records of export payment histories from overseas buyers over the past five years and disclosed typical export payment terms and delinquency trends by 78 industries across 39 major export countries.

This is the first time in South Korea that statistical information on export payment and delinquency characteristics has been disclosed by country and industry in a segmented export market.

SME Delinquency Rate Four Times That of Large Corporations... Increased Risks in Latin America, Middle East, and Africa

Source=Korea Trade Insurance Corporation

According to the report, the payment method in major export markets last year was predominantly non-letter of credit (non-L/C) at 85.5%.

The average payment period by buyers was 71 days, the delinquency rate was 9.3%, and the average delinquency period was 20.8 days.

When classified by the size of exporting companies, SMEs took longer to collect export payments compared to large corporations.

In particular, the delinquency rate of export payments for SMEs (27.7%) was found to be more than four times that of large corporations (6.3%).

Source=Korea Trade Insurance Corporation

By country, Latin America, the Middle East, and Africa recorded higher delinquency rates (16.7% to 18.7%) and longer delinquency periods (23.5 to 29.7 days) than other regions.

The payment periods in these regions (77.4 to 90.3 days) were also longer than the overall average (71.0 days).

By industry of buyers, the delinquency rate in wholesale trade was generally higher than in manufacturing.

Regarding export payment periods, new car sales (102.3 days) and display manufacturing (101.2 days) had the longest durations.

"Utilizing for Contract Negotiations and Risk Management of Export Companies"

Source=Korea Trade Insurance Corporation

Export companies are expected to use the analysis results as a useful benchmark and risk management indicator throughout their export activities by understanding payment trends in their main markets and applying this knowledge to contract negotiations and risk management.

A steel and chemical product exporter located in the Seoul metropolitan area, Company A, stated, "When negotiating export contracts with overseas buyers, we had concerns about whether the payment terms were appropriate, but this analysis result will serve as a highly reliable standard."

A K-SURE official advised, "Export companies trading with buyers in countries or industries with relatively high transaction risks should utilize trade insurance to prepare for the risk of non-recovery of export payments and focus more on risk management, such as early monetization of export receivables."

Source=Korea Trade Insurance Corporation

The report is available for free on the K-SURE website and the comprehensive trade information platform 'K-SURE Research Center.' It will be published regularly as a periodic report in the future.

Lee In-ho, President of K-SURE, said, "This report, the first achievement of the digital New Deal using trade insurance public data, is hoped to be a good reference that helps our companies acquire information power and conduct export activities stably."

He added, "In particular, we will strengthen policy support through trade insurance to help alleviate difficulties faced by SMEs, which were found to be relatively vulnerable to external transaction risks in this analysis."

Lee In-ho, President of Korea Trade Insurance Corporation. (Photo by Korea Trade Insurance Corporation)

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