Shinhan Bank Supports SMEs with 'Accounts Receivable Insurance Premium'... First in Financial Sector

At the business agreement ceremony held on the 4th at Oakwood Hotel located in Songdo, Incheon Metropolitan City, Shin Sang-hyuk, President of Shinhan Bank (left), Yoo Jung-bok, Mayor of Incheon Metropolitan City (center), and Choi Won-mok, Chairman of the Credit Guarantee Fund (right) pose for a commemorative photo.

Shinhan Bank announced on the 7th that it has signed a 'Trade Credit Insurance Premium Support Business Agreement' with Incheon Metropolitan City and the Korea Credit Guarantee Fund (KODIT).

Trade credit insurance is a public insurance system operated by KODIT under the delegated authority from the Ministry of SMEs and Startups. If a company that has subscribed to the insurance sells goods or services on credit and fails to collect payment from the customer, the insurance compensates up to 80% of the loss. Currently, 21 local governments operate separate trade credit insurance municipal agreement products with KODIT, supporting 50-70% of the insurance premiums to help small and medium-sized enterprises (SMEs).

On March 24, Shinhan Bank announced that it would contribute a total of 15 billion KRW (5 billion KRW annually) to KODIT to support the insurance premiums for the trade credit insurance municipal agreement product, the first such support in the financial sector. By signing the first business agreement with Incheon Metropolitan City, the bank plans to help reduce financial costs and stabilize management for SMEs in the Incheon area. With Shinhan Bank’s contribution, the risk of uncollected credit sales amounting to approximately 12.9 trillion KRW for SMEs is expected to be mitigated.

Under this business agreement, KODIT will provide a 10% upfront discount on insurance premiums, and Shinhan Bank will support up to 30% (4.5 million KRW) of the discounted premium for SMEs in Incheon subscribing to the trade credit municipal agreement insurance. Incheon Metropolitan City will support up to 60% (4 million KRW) of the discounted premium.

Premium support is available to any SME whose headquarters or main business site is located in Incheon. Applications can be submitted from mid-May at KODIT Credit Insurance Centers nationwide and Shinhan Bank branches. Exact schedules can be confirmed later on the websites of KODIT, Incheon Metropolitan City, and Shinhan Bank.

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