Korea Credit Guarantee Fund Surpasses 300 Trillion Won in Cumulative Accounts Receivable Insurance Underwriting

Over 20 Trillion Won Underwritten Annually Since 2018

The Korea Credit Guarantee Fund announced on April 7 that the cumulative amount underwritten for accounts receivable insurance surpassed 300 trillion won as of April 3.

Accounts receivable insurance is a public insurance program managed by the Korea Credit Guarantee Fund, which operates it under a mandate from the Ministry of SMEs and Startups. Companies that subscribe to the insurance are guaranteed up to 90% of their unrecovered receivables if they are unable to collect payments after selling goods or services on credit.

Since its introduction in 2004, accounts receivable insurance saw its cumulative underwriting amount exceed 100 trillion won in September 2016, then rapidly increased to surpass 200 trillion won in August 2021. According to the Korea Credit Guarantee Fund, the program has maintained stable growth, recording over 20 trillion won each year since 2018.

Accounts receivable insurance has served as a "management safety net" by covering the risk of uncollected payments from credit transactions during economic crises such as past financial crises and the COVID-19 pandemic.

In recent insolvency and court receivership cases involving large corporations such as Daeyu Winia Group and Homeplus, the insurance promptly paid out claims to insured companies, thereby preventing a chain of bankruptcies among small and medium-sized businesses.

The Korea Credit Guarantee Fund plans to underwrite about 21.7 trillion won in accounts receivable insurance this year. To increase accessibility, it also intends to expand premium support agreement products in collaboration with local governments and public institutions.

A representative from the Korea Credit Guarantee Fund stated, "Surpassing a cumulative underwriting amount of 300 trillion won demonstrates that accounts receivable insurance has become an essential safety mechanism for business transactions. We will continue to improve the system so that more companies can benefit from accounts receivable insurance."

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