Shinbo Acquires 3.6 Trillion KRW in Trade Credit Insurance for Chuseok

Receivables Insurance Underwriting Until the 5th of Next Month

On the 18th, the Korea Credit Guarantee Fund announced that it will underwrite accounts receivable insurance worth 3.6 trillion KRW around this Chuseok holiday period (September 1 to October 15). This is part of the government’s ‘Chuseok Livelihood Stabilization Measures’ aimed at preventing chain bankruptcies caused by non-payment of trade receivables by small and medium-sized enterprises (SMEs) and supporting business stability.

Accounts receivable insurance is a public insurance system operated by the Korea Credit Guarantee Fund since 1997 under a mandate from the Ministry of SMEs and Startups. If a company that has subscribed to the insurance sells goods or services on credit and fails to collect payment from its trading partner, the insurance compensates up to 80% of the loss. This year, the Korea Credit Guarantee Fund is managing accounts receivable insurance with a scale of 21.2 trillion KRW.

The eligible applicants are SMEs or mid-sized companies with average sales below 300 billion KRW. However, industries with low necessity for insurance operation, such as tobacco, alcoholic beverages, and precious metals wholesale, are excluded from insurance contracts.

Companies wishing to apply for insurance can do so at 10 regional dedicated credit insurance centers and 99 nationwide sales offices. They can also receive guidance on the nearest sales organization through the Korea Credit Guarantee Fund customer center.

A representative from the Korea Credit Guarantee Fund stated, “We hope that companies worried about non-payment of credit before the Chuseok holiday will actively utilize accounts receivable insurance to prepare for risks arising from credit transactions and prevent chain bankruptcies in advance.”