“Filling SMEs’ funding gap” ... Woori Bank to provide KRW 200 billion in supply chain finance

[Financial News] Woori Bank is providing financing from the production stage to small and medium-sized enterprises that struggle to cover raw material and labor costs even after receiving orders. The product enables them to obtain loans based on actual order information even before confirmed accounts receivable are generated.
According to financial industry sources on the 3rd, Woori Bank has launched a supply chain finance loan product that combines actual order information between companies with the Korea Credit Guarantee Fund (KODIT)’s “Supply-One” guarantee.
The product was selected the previous day as an outstanding supply chain finance case at the Financial Services Commission’s “6th Meeting on the Great Transformation of Productive Finance.” It was recognized for helping close funding gaps by providing the production funds businesses need from the time they receive orders until they make deliveries.
The product uses actual order information from Woori Bank’s “OneBiz e-MP,” a non-face-to-face corporate loan platform linked to companies’ purchasing systems. Woori Bank provides the order information to KODIT, which reviews it and issues a guarantee certificate. Woori Bank makes a special contribution to fund the issuance of the certificate and provides seller companies with the production funds they need before delivery.
Until now, seller companies have had to pay production costs such as raw material and labor expenses upfront after receiving orders and before delivery, but it has been difficult for them to obtain financing before confirmed accounts receivable are generated. This product focuses on helping them secure financing during the production stage using actual order information.
Eligible applicants are high-performing seller companies recommended by buyer companies that use OneBiz e-MP. Loans can cover up to 80% of an individual order amount, subject to a cap of half the annual transaction value between the buyer and seller companies, up to KRW 3 billion. Using the guarantee certificate as collateral lowers interest rates, and the guarantee fee rate receives a preferential reduction of 0.4 percentage points. Applications for KODIT’s total guarantee limit and the related agreements are handled online, making the service more convenient to use.
Woori Bank plans to provide a total of KRW 200 billion in production financing, starting with KRW 20 billion in support in the fourth quarter of this year. It will also pursue additional support if the limit is exhausted.
Woori Bank plans to expand supply chain finance that supports the growth of small and medium-sized enterprises by actively combining companies’ actual transaction data with policy financing.
[email protected] Lee Hyun-jung Reporter