Chungnam Province Expands Accounts Receivable Guarantees for Small and Medium Enterprises

A Total of 1.06 Billion KRW Invested in Accounts Receivable Insurance Premium Support Program

Chungnam Provincial Government Office Building View

On the 18th, Chungnam Province announced that it will invest a total of 1.06 billion KRW in this year's accounts receivable insurance premium support program, an increase of 240 million KRW compared to last year, to enhance the transaction stability of small and medium-sized enterprises (SMEs) in the province.

This program is designed to mitigate the risk of default that occurs when SMEs are unable to collect payments from their clients. It helps prevent a domino effect of bankruptcies and creates a stable business environment.

The support targets SMEs and mid-sized companies with average annual sales of less than 300 billion KRW in the manufacturing sector or those registered as factories within the province. The funding ratio consists of 50% from the province, 20% from cities and counties, 20% from Shinhan Bank, and 10% from the companies themselves.

Notably, this year, the program has been improved to allow provincial funding even if city and county funds are exhausted first, enabling more companies to benefit from the insurance.

Companies enrolled in accounts receivable insurance can also receive financial benefits such as ▲ an upgrade of one credit rating tier during credit guarantee evaluations ▲ reduced credit insurance premiums ▲ and discounted guarantee rates for securitized corporate bonds.

A provincial official stated, "Given the current challenging economic situation, we expect this support program to provide substantial help to SMEs in the province," adding, "We plan to actively support so that more companies can benefit."

Meanwhile, since 2019, Chungnam Province has guaranteed a total of 572 cases and 3.1878 trillion KRW worth of accounts receivable, and has compensated 2.156 billion KRW to 22 companies that suffered losses due to client defaults.

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