Hwaseong-si Supports Payment for Accounts Receivable Insurance to Strengthen Safety Net for SMEs

Up to 1 Million KRW, 70% Support Limit
For Manufacturing Companies with Sales Under 3 Billion KRW

Hwaseong City in Gyeonggi Province announced on the 26th that it will support up to 70% of the cost of subscribing to the Korea Credit Guarantee Fund's accounts receivable insurance to strengthen the management safety net for small and medium-sized enterprises (SMEs) amid the economic downturn and to prevent chain bankruptcies.

Accounts receivable insurance is a public insurance that compensates up to 80% of losses when a company fails to collect payments due to the closure, bankruptcy, corporate rehabilitation, or delayed payment of its business partners.

The city signed an agreement with the Korea Credit Guarantee Fund last month to reduce the insurance premium burden on local SMEs and to foster self-reliance in managing credit risks arising from credit transactions by supporting the subscription costs for accounts receivable insurance.

Considering that manufacturing companies related to key industries such as automobiles, pharmaceuticals, and semiconductors are organically connected, the city explained that it decided to provide support because it judged that the deterioration of management in a specific company is highly likely to lead to chain bankruptcies of related companies.

The support amount covers up to 70% of the subscription cost within a maximum limit of 1 million KRW. Separately, the Korea Credit Guarantee Fund supports 10%, so companies only need to bear the remaining 20% of the cost to subscribe to the insurance.

The support target is small and medium-sized manufacturing companies with business locations in Hwaseong City and current sales of less than 3 billion KRW. The city plans to provide support on a first-come, first-served basis until the budget is exhausted. For more details, inquiries can be made to the Korea Credit Guarantee Fund Credit Insurance Center or Hwaseong City Corporate Support Division.

Jung Myung-geun, Mayor of Hwaseong City, said, "We will spare no practical support so that local companies can grow steadily even in difficult economic conditions."

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