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“Reducing Trade Instability” – Busan Expands Support for Accounts Receivable Insurance Premiums

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The Busan Metropolitan City (Mayor Park Heong-joon) announced that it will expand its "Accounts Receivable Insurance Premium Support Program" beginning in July to mitigate risks of non-payment from credit transactions and prevent chain bankruptcies among small businesses.

Accounts receivable insurance is a public insurance policy that provides up to 80% compensation for losses incurred when a buyer fails to pay after goods or services are delivered on credit. The City provides partial support of the premium cost (up to 2.5 million KRW per company).

• ●For small businesses:

• ○10% premium discount by the Korea Credit Guarantee Fund (KODIT)

• ○50% subsidy by Busan City

• ○Additional 20% subsidy when using a Shinhan Bank account
  → Total support: up to 70%

• ●For small merchants:

• ○Additional 15% support from Korea Southern Power
  → Total support: up to 85%

Background and Expansion Plans

Due to worsening economic conditions, high interest rates, global supply chain instability, and liquidity challenges for small businesses, the city decided to expand the program.

• ●As of February 2025, Busan’s bill default rate is about 10 times the national average.

Key Changes:

• 1.Budget Increase:

• ○From 125 million KRW to 625 million KRW

• 2.Eligibility Expansion:

  → With this change, even industries not previously supported—such as livestock, food products, shipbuilding, textiles, and hospitality—can now benefit.

  → Greater participation from B2B sectors is expected to produce broader ripple effects across the economy.

• ○Previously limited to strategic industries

• ○Expanded to all industries from the second half of 2025

• ○Industries excluded by KODIT (e.g., gambling, jewelry, food service, real estate) remain ineligible due to their low risk of accounts receivable

Implementation Partner: Korea Credit Guarantee Fund (KODIT)

KODIT will play a key role in effectively implementing this program, using its expertise in:

• ●Venture financing

• ●Startup support

• ●Business consulting for innovation and growth

The City expects this collaboration to generate meaningful results in securing transaction stability for local small businesses.

Mayor Park Heong-joon stated:

“We hope this expanded insurance support will help strengthen transaction security for Busan businesses and prevent chain bankruptcies. We will continue to develop effective policies to reduce business risks in cooperation with public institutions.”