The Public Procurement Service (PPS) is supporting small and medium-sized enterprises (SMEs) in securing liquidity by speeding up payments for government-supplied materials.
The agency said Wednesday it will double the ceiling for its "advance payment system," under which the PPS pays SMEs first for goods they supply to public institutions, to 10 billion won from the previous 5 billion won.
The PPS revised its notice on "eligibility for advance payment of demand materials" and put it into effect Wednesday.
For SMEs signing lump-sum contracts of 10 billion won or less with the PPS, the agency will use its revolving funds to pay for the goods first. As a result, the time SMEs wait to receive payment will be sharply cut to within four hours from the previous five days.
The operating funds needed to expand the advance payment ceiling will be covered by flexibly managing the PPS's 1.5 trillion won in revolving funds, without any separate increase in the government budget.
"We hope this measure will help SMEs that are struggling to secure liquidity," said Lee Hyung-sik, director general for planning and coordination at the PPS.
