Shinbo Signs Business Agreement with Gyeonggi-do to Prevent Chain Bankruptcies of Small and Medium Enterprises

The structure of the accounts receivable insurance premium support business agreement between the Credit Guarantee Fund and Gyeonggi Province.
[Photo by Credit Guarantee Fund]

[Asia Economy Reporter Song Seung-seop] The Korea Credit Guarantee Fund (KODIT) will collaborate with Gyeonggi-do to prevent a chain of bankruptcies among small and medium-sized enterprises (SMEs) and support market expansion.

On the 18th, KODIT announced that it signed a "Trade Credit Insurance Premium Support Agreement" with Gyeonggi-do.

Trade credit insurance is a public insurance system operated by KODIT under the delegation of the Ministry of SMEs and Startups. It is a product that guarantees the risk of credit transactions between companies, and if a company subscribes to this insurance, it compensates up to 80% of the loss incurred when payment from a trading partner is not collected.

Through this agreement, KODIT will offer a 10% discount on trade credit insurance premiums, and Gyeonggi-do will contribute 500 million KRW to KODIT. Based on this, 50% of the calculated premium will be supported up to a maximum of 2 million KRW per company. The target companies are manufacturing SMEs located in Gyeonggi-do with sales of 30 billion KRW or less. To prevent chain bankruptcies and support management stability, KODIT plans to underwrite trade credit insurance worth 20 trillion KRW this year.

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