Guro-gu Significantly Reduces 'Accounts Receivable Insurance Fees' Burden for Small and Medium Enterprises

From February this year, 20% support for trade credit insurance premiums for SMEs in Guro-gu... Combined with existing support, corporate burden rate lowered to 10%, the lowest level among Seoul's autonomous districts

Starting next month, the burden of accounts receivable insurance premiums for small and medium-sized enterprises (SMEs) located in Guro-gu will be reduced.

Guro-gu (District Mayor Moon Heon-il) announced that on the 12th, it will sign a business agreement with the Korea Credit Guarantee Fund at the district office for the 'Accounts Receivable Insurance Support Project,' and from February, it plans to provide additional support of up to 2 million KRW per company for accounts receivable insurance premiums for SMEs.

Accounts receivable insurance is a public insurance system in which the Korea Credit Guarantee Fund compensates a portion of the losses incurred when SMEs sell goods or services on credit to clients and fail to collect the receivables.

Companies subscribed to accounts receivable insurance can be compensated up to 80% of the transaction amount in case of losses from credit transactions. Furthermore, when one insured company transacts with another company, the other company can also share the management stability benefits, significantly preventing chain bankruptcies.

However, many companies hesitate to subscribe due to the high burden of accounts receivable insurance premiums.

This support involves the Korea Credit Guarantee Fund offering a 10% discount on the premium rate to insured companies, and the district providing 20% support of the discounted premium up to 2 million KRW per company.

Adding the existing support from Seoul City (up to 5 million KRW per company, 50% support of the discounted premium) and Shinhan Bank (up to 4.5 million KRW per company, 20% support of the discounted premium), the burden rate of accounts receivable insurance premiums for companies in Guro-gu will be reduced to as low as 10%, which is the lowest level among Seoul’s autonomous districts.

The district expects the number of SMEs subscribing to accounts receivable insurance to increase as a result of this support.

The support targets SMEs with annual sales under 50 billion KRW, whose headquarters or main business sites are located in Guro-gu.

Companies wishing to participate can apply for insurance subscription by visiting or calling the Korea Credit Guarantee Fund branch or Credit Insurance Center within Seoul and submitting the required documents as guided.

For more details, inquiries can be made to the Korea Credit Guarantee Fund or checked on the Guro-gu Office website.

Moon Heon-il, Mayor of Guro-gu, said, “We hope that through this support, more companies will subscribe to accounts receivable insurance and conduct more stable business activities,” adding, “We will continue to discover and implement measures that provide practical help to SMEs.”

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