Management of Indemnification Rights
Management of the right to indemnity is a process for managing and exercising the right, or the right to recourse, in a case in which a company using credit guarantee services becomes insolvent.
KODIT accordingly manages the default and takes responsibility for the failed entity’s obligations. Managing the right to indemnity is an importance source of KODIT’s capital fund.
While management of this right in the past focused on expanding KODIT’s capital fund by maximizing recovery, social demand for supporting debtors’ re-challenge has seen a recent rise. Thus the paradigm of the management of indemnification rights has shifted from bond recovery to assistance with debtor rehabilitation. KODIT is accordingly working to balance the exercise of such rights to expand its capital fund and re-challenge support for debtors.
KODIT has run its re-challenge support program since 2010 to help failed SMEs through rehabilitation and offer rehabilitated SMEs another chance.
The program is composed of the “Re-challenge rehabilitation guarantee,” which provides assistance in the repayment of obligations owed to KODIT after subrogation, and the “Re-challenge recovery guarantee,” which provides assistance in the repayment of obligations owed to KODIT and also offers new credit guarantees.
The year 2019 saw the introduction of the Value-Up Program as a preemptive form of corporate restructuring to help overcome temporary management crises.