Incheon City Signs Agreement with Shinhan Bank and Korea Credit Guarantee Fund for Additional Support on Accounts Receivable Insurance Premiums

Incheon City is joining forces with Shinhan Bank and the Korea Credit Guarantee Fund to reduce financial costs for small and medium-sized enterprises (SMEs) struggling with high interest rates.

On the 7th, the city announced that on the 4th, it signed a business agreement on 'Additional Support for Accounts Receivable Insurance Premiums' with Shinhan Bank and the Korea Credit Guarantee Fund at the Oakwood Lotus Room.

The agreement focuses on providing additional support for insurance premiums on accounts receivable to prevent the risk of corporate bankruptcy and chain insolvencies caused by credit transactions.

When subscribing to accounts receivable insurance, the city previously supported 60% of the insurance premium up to a maximum of 4 million KRW, and the Korea Credit Guarantee Fund offered a 10 percentage point discount on the premium. However, Shinhan Bank, the city’s financial institution, will now provide additional support of up to 30% and 4.5 million KRW over three years with an annual budget of 1 billion KRW, significantly reducing SMEs’ self-payment to 10%.

The support targets all industries eligible for insurance, including wholesale and retail businesses. If payment is not collected from clients after credit sales, compensation of up to 80% of losses per insurance product is possible, and the support period is one year.

At the 'Additional Support for Accounts Receivable Insurance Premiums' business agreement ceremony held on the 4th at Oakwood Hotel in Incheon, (from left in the photo) Jeong Sang-hyeok, CEO of Shinhan Bank, Yoo Jeong-bok, Mayor of Incheon, and Choi Won-mok, Chairman of the Credit Guarantee Fund, are taking a commemorative photo. [Photo provided by Incheon City]

In February 2020, the city supported accounts receivable insurance premiums worth 214 billion KRW for 1,697 companies with a budget of 2.9 billion KRW through an agreement with the Korea Credit Guarantee Fund. This year, it plans to invest 1.6 billion KRW to support insurance premiums worth 16 billion KRW.

An official from Incheon City stated, "Through this agreement, SMEs can secure management stability for goods-selling companies without the pressure of chain insolvencies by bearing only 10% of the cost, thereby expanding the scale of credit sales and improving profitability."

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