Two-in-One Insurance - KODIT

KODIT's new sales receivable insurance service can also be assigned as colleteral for SME's loan

Introduction

“Two-in-One” insurance, which was introduced in January 2011, is a synthetic financial facility of sales receivables insurance and a bank loan. Suppliers purchase sales receivables insurance to cover the non-payment risk of buyers and take out loans by using the insured sales receivables as collaterals.

Process

Step1) Take over process

• Receive an application after consulting eligibility to be covered by insurance and the possibility as collateral as well
• Evaluate buyer's risk based on a new method adjusted on loss given insurance
• Review and determine the condition of the contract
• Issue both "Dasarang" and "Two-in-One" insurance policy

Step2) Loan process

• KODIT and SME sign "'Two-in-One" insurance contract
• A financial institution and a loaner(SME) sign "online sales receivable insurance-backed loan contract"
• A company and a buyer trade sales receivable through "e-sang networks", an online marketplace
• Under the name of "Two-in-One" insurance, the contractor hands over sales receivable to the financial institution to get a loan in return
• Debt is paid when a buyer pays by the due date

Step3) Reward process

SMEs will be able to collect payment sooner at lower costs thanks to KODIT's "Two-in-One" insurance. It will eventually cut the risk of chain-bankruptcy originates from long payment terms prevailing among SMEs, stabilizing their business environment by getting rid of jitters on insecure payment.