State-run Export-Import Bank of Korea said Monday it will provide 500 billion won (US$488m) this year to local exporters by purchasing their receivables at a discount as part of the South Korean government's efforts to boost exports.
The policy bank plans to offer the factoring service from April and will expand it from small- and medium-sized enterprises (SMEs) to large companies in stages, the lender said in a statement.
"The service will greatly assist tech exports by local SMEs," the state bank said, adding that it will also aid local companies exploring new markets in East European and Latin American countries.
Factoring is a means of financing that allows companies to sell their accounts receivable at a discount to a factor, who then assumes the credit risk of the account debtors and receives cash as the debtors settle their accounts.
