Ministry of SMEs and Startups Introduces 'Sangsaeng Payment' in Chungcheongnam-do

Ministry of SMEs and Startups - Chungcheongnam-do Hold 'Mutual Growth Payment Expansion Business Agreement Ceremony'

[Asia Economy Reporter Kim Cheol-hyun] The Ministry of SMEs and Startups is joining hands with Chungcheongnam-do to expand the 'Win-Win Payment' system among local governments. The Ministry of SMEs and Startups announced on the 14th that it signed a 'Business Agreement for the Regional Expansion of Win-Win Payment' with Chungcheongnam-do.

With this agreement ceremony as a milestone, Chungcheongnam-do will become the first local government to introduce the 'Win-Win Payment' system, and from the end of this month, it will actively use Win-Win Payment to make payments during public procurement. Win-Win Payment is a payment system that enables the primary contractor to directly pay transaction amounts to lower-tier partner companies, ensuring that lower-tier partners in business relationships with Chungcheongnam-do receive payments stably. Lower-tier partners can receive cash on the payment date or, if funds are needed before the payment date, can secure cash early by discounting based on Chungcheongnam-do’s credit.

In particular, when discounted through Win-Win Payment, unlike promissory notes, the discount is based on Chungcheongnam-do’s credit rather than the lower-tier partner’s credit, so even in case of default, the right to claim repayment cannot be exercised against the lower-tier partner, preventing a chain of defaults. Companies receiving Win-Win Payment from local governments and then paying Win-Win Payment to other companies such as lower-tier partners will also receive benefits such as up to 0.5% tax support on Win-Win Payment usage, additional points when applying for Win-Win type smart factory projects, a 0.2% reduction in technology guarantee fees, and increased policy fund loan limits.

Going forward, as Win-Win Payment expands to local governments nationwide, even if only 3% of local government public procurement payments are made through Win-Win Payment, it is expected to create an effect of supplying over 1.4 trillion KRW annually in liquidity to regional SMEs.

Minister Lee Young said, "I am confident that Chungcheongnam-do’s first introduction of Win-Win Payment will serve as a catalyst for its expansion to local governments nationwide," and added, "In the midst of economic crises such as high inflation, high interest rates, and high exchange rates, we will support SMEs struggling to secure cash and ensure that Win-Win Payment, which has been used in the private sector, expands into the public sector including government and local governments, with the Ministry of SMEs and Startups backing this effort."

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