Seoul City Executes 70% of Public Procurement Budget in First Half... Supporting Small and Medium Enterprises

Intensive Purchase of SME Products in the First Half of the Year
Support for Accounts Receivable Insurance Premiums and Export Insurance Guarantee Fees

The Seoul Metropolitan Government will execute 70% of the public procurement budget in the first half of the year to help small and medium-sized enterprises (SMEs) recover their sales. This measure is aimed at SMEs struggling due to prolonged economic downturn and sluggish domestic demand.

According to Seoul City on the 6th, the city has decided to increase the public procurement target amount to support the sales recovery and growth of SMEs by 10% compared to last year, while promptly executing 70% of the budget within the first half of the year.

Yonhap News

This year, the total public procurement target amount for Seoul City is 3.1619 trillion KRW, a 10% increase from last year's 2.8859 trillion KRW. Last year, the total public procurement amount was approximately 3.0059 trillion KRW, achieving a public procurement performance rate of over 75%, which is higher than the mandatory 50% purchase ratio for SME products. This year, the city plans to strengthen target compliance management by reviewing and sharing progress quarterly, and will continuously encourage promotion and purchasing activities targeting autonomous districts and affiliated institutions.

Additionally, to encourage the development of innovative products by SMEs that lead private sector technological innovation and public service improvement, Seoul City plans to activate applications for designation of R&D demonstration results such as testbeds as innovative products by the Public Procurement Service.

To prepare for cases where SMEs sell goods or services on credit to clients but fail to collect payments, the city will support 'accounts receivable insurance premiums' up to a maximum of 5 million KRW per company. Following last year, a total budget of 1.5 billion KRW will be invested, aiming to support more than 1 billion KRW in the first half of the year. SMEs subscribed to accounts receivable insurance can receive compensation of up to 80% for accounts receivable incurred during the one-year insurance period if reasons such as client check defaults, business closures, or initiation of rehabilitation or bankruptcy procedures occur. Last year, insurance premiums of 2.33 billion KRW were supported for 1,160 companies, and 335.4 million KRW in insurance payments were received by 65 companies.

Furthermore, to eliminate the risk of non-payment of export proceeds and support stable trade finance such as funding for SMEs amid the global economic slowdown, export insurance and guarantee fees will be supported up to 3 million KRW per company. Following last year, a total budget of 1.5 billion KRW will be invested, with plans to support more than 1 billion KRW in the first half of the year.

Joo Yong-tae, Director of the Seoul Metropolitan Government’s Economic Office, said, "In a situation where domestic and international uncertainties are expanding, we will remove growth obstacles for SMEs, the core and driving force of Seoul’s economy, and establish a foundation for safe management. We will continue to provide support to restore the livelihood economy and invigorate the economy."

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