Credit Guarantee Procedure - KODIT

KODIT has a five-step procedure in providing credit guarantee services. Through this procedure, KODIT investigates and evaluates the credit standing of the applying company, and decides whether to accept the credit guarantee, along with the guarantee amount. The five steps are application, consultation, credit investigation, credit evaluation, approval and issuance of letter of credit guarantee.

Flow of Credit Guarantee Services

 

Application

The first step in requesting our credit guarantee service, a company must submit an application to KODIT by one of two ways: by Web (Cyber) Application or by Direct Application

• Web Application
  - on the Cyber Branch of KODIT in KODIT's Website.
• Direct Application
  - by visiting one of the offices of KODIT.

Consultation

• Consultation is the process of checking the credit status of the applicant and preliminarily inspecting the adequacy of the application.
• Consultation is done when the applicant visits a KODIT branch office, a KODIT staff member visits the applicant and Teleconsultation.
• If the applicant has reason to be disqualified, such as a conflict with the internal regulations of KODIT, the application for the guarantee service can be denied.

Credit Investigation

The third step is credit investigation. At this stage, KODIT reviews all the documents and information submitted by the applicant or collected from other sources. After documents are reviewed, KODIT personnel make an on-site inspection and evaluate the applicant's facilities, production capabilities, and operations. Visiting the applicant's office or factory allows KODIT to confirm the information submitted and to obtain additional information that could not be acquired otherwise, such as the employees' morale.
Then KODIT personnel compile a report on the credit status of the applicant. The contents of the report include information on business operations, credit records, financial status, personnel and management, etc.

Credit Evaluation

The fourth step is the overall evaluation of the applicant's credit. Credit evaluation is the process by which KODIT evaluates the credit status of the applicant, decides whether to accept or reject the application, and decides the guarantee amount if accepted. There are three different credit evaluation methods, which are applied according to the guarantee amount and the type of guarantee.

Approval And Issuance Of The Letter Of Credit Guarantee

When the application is approved, KODIT makes a credit guarantee agreement with the client, receives the guarantee fee, and issues a letter of credit guarantee. In cases of guarantee for bonds issuance, guarantee for acceptance of trade bills, and guarantee for commercial bills, KODIT stamps its signature on the face of the bond or the bill instead of issuing a letter of credit guarantee.