Hana Bank Signs 'Accounts Receivable Insurance Sales Agreement' with Korea Credit Guarantee Fund

Park Ji-hwan, Vice President of Hana Bank (left), and Choi Chang-seok, Director of the Korea Credit Guarantee Fund, are posing for a commemorative photo after the signing ceremony.

[Asia Economy Reporter Kwangho Lee] Hana Bank announced that on the 4th, it signed a 'Receivables Insurance Recruitment Business Agreement' with the Korea Credit Guarantee Fund at Hana Bank's headquarters to support the prevention of chain bankruptcies among small and medium-sized enterprises (SMEs) and to strengthen the management safety net.

Receivables insurance is a public insurance system in which the Korea Credit Guarantee Fund compensates a portion of the losses incurred when an SME (the insurance policyholder) sells goods or services on credit to a client (purchasing company) and fails to collect the accounts receivable.

Currently, this product is sold only by the Korea Credit Guarantee Fund, but the Financial Services Commission revised the banking supervision regulations in July last year at the request of the Ministry of SMEs and Startups to allow banks to engage in the recruitment agency business for receivables insurance as a concurrent business.

Through the business agreement with the Korea Credit Guarantee Fund, Hana Bank decided to be the first among commercial banks to carry out the recruitment business for receivables insurance starting from July 1.

The scope of banking operations is limited to recruitment tasks (promotion of receivables insurance, recommending potential customers, guidance on required documents, etc.), and subscription, underwriting, and management tasks after recruitment will continue to be handled by the Korea Credit Guarantee Fund as before.

A Hana Bank official said, "By introducing this product to SMEs that are hesitant to actively expand their sales channels due to concerns about collecting receivables, we expect to reduce the risk of bankruptcy for trading companies caused by deterioration of accounts receivable."

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