"Exclusive Warranty System for Joint Purchase of Raw Materials Helps Improve SME Performance"

[Asia Economy Reporter Donghyun Choi] Small and medium-sized enterprises (SMEs) utilizing the 'Dedicated Guarantee System for Joint Purchase of Raw Materials' showed superior sales and operating profits compared to those not using the system.

According to an analysis conducted by the Korea Federation of SMEs on the support effects for 1,141 SMEs using the Dedicated Guarantee System for Joint Purchase of Raw Materials on the 24th, these companies recorded operating profits 109 percentage points higher, total sales 15 percentage points higher, and total number of employees 13 percentage points higher than companies not using the system.

This analysis compared the financial statements of SMEs that used the system between 2018 and 2021 with those of non-users in similar industries and sizes. Overall, it was found that companies utilizing the system demonstrated outstanding financial performance and employment creation effects.

Companies using the system experienced an average increase of 12% in sales, 10% in total employees, and 11% in operating profits when comparing one year before and one year after receiving support. In contrast, non-users saw operating profits decrease by 98%, and sales and total employees each declined by 3% during the same period.

Additionally, in this survey, companies reported an average annual purchase cost reduction of 180 million KRW through the Dedicated Guarantee System for Joint Purchase of Raw Materials. They responded that the system contributed in the following order: securing liquidity (97.3%), stabilizing management (94.3%), increasing sales (74.4%), and boosting production volume (62.4%).

Furthermore, it was analyzed that the dedicated guarantee actively supported SMEs facing difficulties in using formal financial institutions, contributing to improvements in corporate credit ratings.

Jinhyung Cho, Head of the Cooperative Division at the Korea Federation of SMEs, stated, "Over the past four years, we have confirmed the effects of supplying the Dedicated Guarantee System for Joint Purchase of Raw Materials on corporate growth and stability. Recently, we will continue to expand and supply guarantees to SMEs and small business owners facing severe raw material purchasing difficulties to spread the benefits of the Dedicated Guarantee System for Joint Purchase of Raw Materials."

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