Mubo-Jungjingong, Business Agreement for Fostering Exporting SMEs

Korea Trade Insurance Corporation and Small and Medium Business Corporation (SBC) signing a business agreement for "Joint Support by Growth Stage of Exporting Small and Medium Enterprises." Lee In-ho, President of K-Sure (left), and Kim Hak-do, Chairman of SBC (right), posing for a commemorative photo. (Photo by Korea Trade Insurance Corporation)

[Asia Economy Reporter Moon Chaeseok] The Korea Trade Insurance Corporation announced on the 1st that it signed a "Business Agreement for Joint Support by Growth Stage of Exporting SMEs" with the Small and Medium Business Corporation on the 26th of last month.

The two organizations agreed to provide 20 billion KRW in liquidity funds to help the growth of SMEs with high export growth potential. This agreement is a follow-up measure to the government's confirmed "Trade Digital Transformation Plan."

The distinctive feature of this project is the tailored support according to the "growth stage of the company." K-sure will support up to 10 billion KRW by quickly reviewing and issuing "Pre-shipment Export Credit Guarantees" with a limit of 200 million KRW per company for export companies recommended by the Small and Medium Business Corporation to facilitate smooth funding.

The Small and Medium Business Corporation plans to provide loans up to 10 billion KRW by giving preferential rating evaluations during policy fund loan reviews with a limit of 200 million KRW per company for SMEs recommended by K-sure.

Besides the recommended companies, K-sure will offer customized trade insurance packages according to growth stages, including free buyer credit investigations, contract-based special guarantees, trade insurance education and consulting, and export safety net insurance to other SMEs.

Additionally, together with the Small and Medium Business Corporation, they will work on ▲strengthening the capabilities of youth start-ups ▲linking export support projects of the Small and Medium Business Corporation with K-sure’s guarantee insurance ▲cross-financial support ▲supporting credit investigation services for overseas-based companies.

Beyond signing this agreement, K-sure has made various efforts to support the government's "Trade Digital Transformation Plan." A representative example is providing export credit guarantee limit preferences and automatic enrollment benefits for short-term export insurance to export companies listed on the "Korean-style Global Online Platform."

Previously, the government announced plans to foster a "Korean-style platform" ranked 5th globally by 2025 by merging the three major public online platforms of KOTRA, the Small and Medium Business Corporation, and the Korea International Trade Association. Through this, it aims to expand Korea’s trade volume from about 1 trillion USD annually to 2 trillion USD by 2030.

Furthermore, K-sure is promoting amendments to the Trade Insurance Act to enable various organizations such as associations and groups to contribute to the trade insurance fund and provide financial support tailored to industry characteristics.

This year, K-sure has focused more on supporting exports of SMEs rather than large corporations, judging that SMEs have been hit harder than large companies due to the prolonged COVID-19 pandemic and the strong Korean won.

Lee In-ho, President of K-sure, said, "Although uncertainty remains high due to the prolonged COVID-19 pandemic, we will provide multifaceted support so that our companies can discover growth opportunities in the new trade environment such as digital transformation."