Korea SMEs and Startups Agency (KOSME) said on the 8th it will fully roll out the Small and Medium-Sized Corporations Crisis-Overcoming Alert Service to proactively prevent management crises at small and medium-sized corporations.
The service was presented as a key task in a briefing by agencies under the Ministry of SMEs and Startups on the 12th of last month. With management uncertainty rising recently, it was prepared to block insolvency among small and medium-sized corporations at an early stage and support the swift normalization of corporations showing signs of crisis.
Korea SMEs and Startups Agency (KOSME) will use its in-house early warning system (EWS) to comprehensively analyze internal and external data, including financial status, financial transaction information, and representative's credit information, and will proactively provide stage-by-stage, tailored policy information to corporations where signs of crisis are detected.
Previously, corporations had to find relevant support measures themselves after recognizing a management crisis, but the new service will be operated so that Korea SMEs and Startups Agency (KOSME) detects warning signals early and guides corporations to needed policy funds, liquidity support, and management improvement programs.
The alert service is divided into four stages according to the level of crisis: ▲ caution ▲ preliminary alert ▲ alert ▲ insolvency. For corporations at the "caution" and "preliminary alert" stages, it will regularly provide information on policy funds and liquidity support as well as management improvement. For corporations at the "alert" stage, it will focus on connecting support for management normalization, such as rehabilitation consulting. For corporations that have entered the insolvency stage due to closure, it will actively guide them to debt reduction and installment repayment and other debt adjustment programs to help restore credit and make a fresh start.
Korea SMEs and Startups Agency (KOSME) will first operate the alert service focusing on insolvent corporations in urgent need of policy support, then gradually expand the target to corporations at the caution, preliminary alert, and alert stages. Chairperson Kang Seok-jin of Korea SMEs and Startups Agency (KOSME) said, "For small and medium-sized corporations, early recognition and preemptive support matter more than after-the-fact responses," adding, "Through this alert service, we will raise the recovery prospects of crisis-hit corporations and strengthen our role as a financial safety net for small and medium-sized corporations."