Electronic Credit Guarantee Services - KODIT

To keep pace with rapid developments in information technology, KODIT has been making its efforts to digitalize services.

E-Commerce Guarantee

KODIT has developed e-commerce guarantees to promote the safer e-commerce transactions. The e-commerce guarantee system is based on the on-line network linking KODIT, financial institutions, enterprises and the e-commerce marketplaces. e-commerce guarantees can be divided into two categories : e-commerce loan guarantee and e-commerce liabilities guarantee.

E-Commerce Loan Guarantee

This is a service to guarantee loans that the buyers would get from financial institutions in order to facilitate the purchasing process under the e-commerce contracts.

Flow Of E-Commerce Loan Guarantee

  Procedure of E-Commerce Loan Guarantees

• Consultation of the buyers with their bank
• The banks transmit consultation information to KODIT for the buyers to apply for guarantee
• KODIT conducts credit investigation, screening and authorizes agreements for the loan guarantee and issues the e-guarantee to the banks.
• The banks receive the e-guarantee; the buyers can get loans from the banks.
• The buyers and the suppliers conclude e-commerce contracts on the market place and the market place transmits the contract information to KODIT and the banks.

E-Commerce Liabilities Guarantee

This is a service to guarantee the liabilities, which SMEs have to perform on the credit transaction.

Flow of E-Commerce Liabilities Guarantee

Procedure of E-Commerce Liabilities Guarantee

• The buyers apply for liabilities guarantee on the market place.
• KODIT conducts the credit investigations, screening and authorizes an agreement for the liabilities guarantee, and then the e-guarantee is issued.
• The buyers can purchase goods on credit within the limit noted on the e-guarantee, and the market place transmits transaction information to KODIT.
• The suppliers deliver the goods and receive the payment at a prior set date.

Core feature of Digitization

The core feature of digitalized credit guarantee services is the introduction of the electronic credit guarantee certificates, which are sent from KODIT to creditor institutions via the Internet, in place of conventional letter of credit guarantees. Digitalized credit guarantee services allow companies applying for credit guarantees to reduce the number of visits to KODIT and financial institutions. In addition, electronic guarantee certificates are easier to store and safeguard than letter of credit guarantees.

Performance of Digitization

In March 2002, KODIT won the bid for the e-commerce category of the 'B2B Network Implementation Support Project' by the Ministry of Commerce, Industry and Energy. In conjunction with this project, KODIT launched a B2B network called Gateway System to facilitate B2B e-commerce. The Gateway System has contributed greatly to the development of the e-commerce in Korea. It has helped to reduce the transaction costs of SMEs and enhance their competitiveness. Furthermore, it has enabled fair and transparent transactions between companies and companies or between companies and government authorities. In the future, KODIT expects to link the Gateway System to overseas companies and e-commerce marketplaces, with the aim of becoming a global B2B e-commerce hub.