Shinhan Credit Guarantee Fund-Ulsan Metropolitan City Sign 'Trade Credit Insurance Business Agreement'

Shinbo offers 10% discount on accounts receivable insurance premiums for small and medium enterprises in Ulsan
Ulsan City contributes 400 million KRW to support 50% of the final calculated insurance premium

[Asia Economy Reporter Park Sun-mi] The Korea Credit Guarantee Fund and Ulsan Metropolitan City announced on the 13th that they signed a 'Trade Credit Insurance Premium Support Business Agreement' at the headquarters of Dongnam Machinery located in Goyeon Industrial Complex, Ulsan.

This agreement was prepared to help small and medium-sized enterprises (SMEs) located in Ulsan overcome the crisis caused by the prolonged COVID-19 pandemic and stabilize the local economy. The Korea Credit Guarantee Fund will offer a 10% discount on trade credit insurance premiums, and Ulsan City will contribute 400 million KRW to the Fund to support 50% of the final calculated premium, up to a limit of 2 million KRW per company.

The support targets SMEs engaged in manufacturing located in Ulsan.

Trade credit insurance is a public insurance system operated by the Korea Credit Guarantee Fund under the commission of the Ministry of SMEs and Startups, which guarantees the risk of credit transactions between companies. It compensates up to 80% of the loss incurred when a company that has subscribed to the insurance fails to collect payment from its clients after selling goods or services on credit.

Especially this year, concerns about uncollected accounts receivable have increased due to the prolonged COVID-19 situation, leading to growing interest in trade credit insurance. The amount of trade credit insurance subscribed by SMEs between January and July this year was approximately 13.4 trillion KRW, an increase of 1.1 trillion KRW compared to the same period last year.

A representative from the Korea Credit Guarantee Fund said, “We hope this agreement will help SMEs located in Ulsan, which are struggling due to the economic downturn, to stabilize their management quickly,” and added, “We will do our best to prevent a chain bankruptcy of SMEs and drive growth through more active support.”