Launch of Jodal Enterprise Mutual Aid Association... "Guarantee Fee Burden Will Decrease"

With the launch of the Procurement Enterprise Mutual Aid Association, the burden of guarantee fees for early-stage startups and small and venture procurement enterprises is expected to decrease.

On the 5th, the Public Procurement Service announced that the Procurement Enterprise Mutual Aid Association (hereinafter referred to as the Association) held its inaugural general meeting at EL Tower in Seoul. The Association is a corporation established based on the "Act on Procurement Business," and plays a role in supporting guarantees, mutual aid, and financial loans for procurement enterprises through mutual cooperation among businesses that have signed procurement contracts.

Following the general meeting, the Association plans to obtain establishment approval from the Public Procurement Service and complete corporate registration by August. From the time of corporate registration, the Association will operate various projects aimed at enhancing the autonomous economic activities and economic status of procurement enterprises.

The full-scale guarantee business is scheduled to begin in December this year. The core of this business is that the Association will build a business foundation such as a guarantee system and start issuing guarantee certificates for contracts, bids, and advance payments from the end of the year, offering guarantee fees more than 20% lower than those of private guarantee companies, thereby reducing the cost burden on procurement enterprises.

Instead of mainly using private guarantee institutions as before, procurement enterprises will be able to receive guarantee services at relatively lower fee rates through the Association.

The Association will also provide financial support through low-interest loans to its members. This financial support is expected to reduce the economic burden on procurement enterprises arising from liability for damages and compensation for losses due to occupational accidents during business operations.

In addition, the Public Procurement Service will support the growth of procurement enterprises through management consultation, diagnosis, education, technology improvement, and training via the Association.

Commissioner Lim Gi-geun said, “I hope the Mutual Aid Association will contribute to overcoming the difficulties faced by procurement enterprises in the field by providing high-quality products and services related to guarantees and mutual aid,” and added, “The Public Procurement Service will spare no effort to support the smooth operation and successful establishment of the Association in the field.”