Shinbo-Shinhan Bank-Incheon City Join Hands to Support SME Accounts Receivable Insurance Premiums
80% Discount on Insurance Premiums
The Korea Credit Guarantee Fund (KODIT) announced on the 8th that it has signed a "Trade Credit Insurance Premium Support Business Agreement" together with Incheon Metropolitan City and Shinhan Bank. This is the first time KODIT has entered into a tripartite business agreement with a local government and a commercial bank to support insurance premiums for small and medium-sized enterprises (SMEs).
This agreement was established to prevent a chain bankruptcy of SMEs facing difficulties due to the compounded crisis of the three highs (high inflation, high interest rates, and high exchange rates) and to support the expansion of sales channels amid worsening domestic and international conditions.
The support targets SMEs whose headquarters or main business sites are located in Incheon and operate in industries eligible for insurance. KODIT will offer a 10% discount on the subscribed insurance premiums.
Incheon Metropolitan City will support 60% of the insurance premium up to a maximum of 4 million KRW per company, and Shinhan Bank will additionally support 20% of the insurance premium up to a maximum of 4.5 million KRW per company. Thus, SMEs located in Incheon can receive a total of 80% insurance premium support.
Trade credit insurance is a public insurance system operated by KODIT under the commission of 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 client, the insurance compensates up to 80% of the loss.
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Choi Won-mok, Chairman of KODIT, said, "Starting with this agreement with Incheon Metropolitan City, KODIT and Shinhan Bank plan to actively expand the support targets nationwide to alleviate the cost burden of trade credit insurance for SMEs and to support stable business activities." He added, "KODIT will continue to actively cooperate with related organizations to help SMEs overcome crises and revitalize the regional economy."
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