Korea Software Financial Cooperative

What Korea Software Financial Cooperative does

Korea Software Financial Cooperative (KSFC; 소프트웨어공제조합) is a South Korean government-affiliated mutual-aid cooperative established on January 3, 1998 under Article 61 of the Software Promotion Act. It is the sole entity legally designated as a government guarantee organization for the Korean software industry, providing financial and guarantee support to software companies that lack the tangible collateral required by traditional financial institutions. As of 2025, KSFC served 2,898 member companies with 759.65 billion KRW in total assets and 11.32 trillion KRW in annual guarantee volume.

KSFC's product set centers on five guarantee categories — bid, contract, defect, advance payment, and specialized guarantees (electronic financial transaction, government subsidy, public welfare operations, performance payment, sales money) — priced on a transaction/take-rate basis (0.017% to 0.500% depending on product, with combined multiples up to 62x of share contribution). Capital loans are extended at a 2.5% base annual rate (with 0.5% surcharge per renewal year), and capital investment is provided to high-growth software firms. A second revenue pillar is the damage-indemnification business, which since 2019 has offered personal information protection liability, software liability, regulatory sandbox liability, and worker accident indemnification through KB Insurance, Samsung Fire & Marine Insurance, and DB Insurance. KSFC also runs the Software Dream Center (an 18,682㎡ startup-incubation facility near Pangyo) and the Samsung Jeil Building (95.5% occupied) and Software Dream Center (96.7% occupied) as rental real estate.

KSFC's go-to-market combines a self-serve web portal (24/7 with certificate-based login), three regional sales divisions (East Seoul, West Seoul, Wide-Area), and direct electronic integration with the G2B national procurement portal and 12+ B2B enterprise partners (Samsung SDS, SK, LG CNS, KEPCO, Korea Railroad, Korea Water Resources, NongHyup Information System, IBK Systems, DL E&C, etc.). The self-guarantee feature (industry first, 2022) lets members issue up to 100 million KRW of guarantees instantly online for a 10% fee discount. Membership acquisition runs through credit evaluation (10-grade SCR1–SCR10 / 22-step system), share contribution, and agreement signing. Pricing is structurally discounted to 1/5 of private guarantee institutions, with the minimum fee at 3,000 KRW versus 15,000 KRW elsewhere, supported by public-sector government contributions and private-sector member investment.

Name

Korea Software Financial Cooperative

Legal name

Korea Software Financial Cooperative

Website

https://ksfc.or.kr

Company type

Private

Founded year

1998

Operating status

Operating

Headcount range

11–50 employees

Short description

South Korean government-authorized cooperative providing low-cost guarantees, capital loans, and damage-indemnification insurance exclusively to the country's 2,898 member software companies under the Software Promotion Act.

Ownership category

akta.pro rank

Headquarters

HQ city

Seoul

HQ country

South Korea

HQ region

Asia

Offices4 records

Markets served

GTM type

B2B

Offering type

Services

Cost components

Personnel, Operations, Infrastructure, Technology or R&D, Marketing or Sales, Supply Chain, Others

Revenue model

1. Guarantee Fees (보증 수수료): KSFC charges guarantee fees (rates vary by guarantee type) for issuing bid bonds, performance bonds, and other guarantee instruments. Fees are calculated as a percentage of the guaranteed amount and are discounted based on membership share contribution and guarantee amount. Export-related guarantees receive a 20% fee discount.
2. Capital Lending Interest (자금대여 이자): Operating capital loans provided to members at a base rate of 2.5% per annum, with an additional 0.5% per year for extensions beyond the initial 1-year loan period. Loan limits are calculated based on share contribution multiplied by evaluation ratio (0.2x-0.8x based on credit rating).
3. Capital Investment (자금투자): KSFC identifies and invests in software companies with excellent growth potential to help promote industry development.
4. Damage Compensation Insurance Brokerage (손해공제): Through business agreements with partner insurance companies (KB손보, 삼성화재, DB손보), KSFC offers group insurance products (personal information protection liability, software damage compensation, regulatory sandbox liability, worker accident compensation) to members and associate members at discounted rates vs individual purchase. KSFC acts as a cooperative intermediary, with partner insurers handling claims processing.
5. Real Estate Rental Income: Rental income from Samsung Jeil Building (99.5% occupancy) and Software Dream Center (96.7% occupancy) in Seongnam. KSFC acquired SW Tower in Gangnam-gu in May 2015.

Pricing tiers

Go-to-market motion3 records

Distribution channels4 records

Marketing channels7 records

Core offering

Korea Software Financial Cooperative (KSFC) is a government-affiliated mutual aid cooperative providing financial and guarantee support to Korean software companies. Its core offerings include performance guarantees (bid, contract, defect, advance payment, electronic financial transaction, government subsidy, and public welfare operation guarantees), operating capital loans at preferential interest rates (base 2.5% per annum), capital investment in growth-stage software companies, and a damage indemnification program (personal information protection liability, software liability, regulatory sandbox liability, worker accident). Members can issue self-guarantees online up to 100 million KRW.

Product overview

Korea Software Financial Cooperative (KSFC) operates as a government-affiliated financial cooperative providing a comprehensive suite of financial services to software companies in South Korea. The core offering consists of guarantee products (이행보증) covering bid bonds, contract bonds, defect warranties, advance payment guarantees, and specialized guarantees (electronic financial transactions, government subsidies, public welfare operations, performance payments, sales money). These are supported by credit evaluation services that assign credit ratings determining guarantee limits. KSFC also provides capital loans (자금대여) at preferential interest rates (base 2.5%) and capital investment services for high-potential software companies. A significant product pillar is the damage indemnification (손해공제) program, which offers personal information protection liability, software liability, regulatory sandbox liability, and worker accident indemnification coverage through partnerships with KB손보, 삼성화재, and DB손보. Additional services include an online self-service portal (온라인창구), self-service guarantee printing (셀프보증), guarantee document mailboxes, expert consultation (legal, labor, tax, patent), and a startup incubation facility (소프트웨어드림센터). The total annual guarantee volume reached 11.3 trillion KRW in 2025, serving 2,898 member companies.

Differentiator

Problem solved

Functional benefit

Products and services

• Bid Guarantee (입찰보증) Guarantees that a bidder who wins a contract will proceed to sign the contract. Typically covers 3-10% (usually 5%) of the bidding price, term of 5 days (short-term) or one year (long-term). Fee rate: 0.017%. Maximum guarantee multiple: 16x. For software companies bidding on public/private contracts.
• Contract Guarantee (계약보증) Guarantees fulfillment of contract obligations including default penalties, cancellation charges, and compensation. Covers approximately 5-20% (usually 10%) of the contract price. Fee rate: 0.286% annually. Maximum guarantee multiple (contract + defect combined): 33x. For software companies executing contracts.
• Defect Guarantee (하자보수보증) Guarantees coverage of defect repair costs during the warranty liability period following contract completion. Typically 2-10% of contract price. Fee rate: 0.127% (reduced from 0.254% in November 2025). For software companies completing projects.
• Advance Payment Guarantee (선금지급보증) Guarantees refund of advance payments if the contractor fails to fulfill the contract. Covers the advance payment amount. Fee rate: 0.397%. Maximum guarantee multiple: 13x. For software companies receiving advance payments on contracts.
• Electronic Financial Transaction Guarantee (전자금융거래보증) Guarantee product for electronic financial transactions, the first such product in the indemnification industry. Fee rate: 0.300%. For software companies engaged in electronic financial transactions.
• Government Subsidy Guarantee (정부보조금보증) Guarantees refund of government subsidies if the recipient fails to fulfill associated obligations. Fee rate: 0.200%. For software companies receiving government subsidies.
• Public Welfare Operations Guarantee (공공복지운영대행보증)

Quantifiable outcome

• Guarantee rates up to 1/5 of private guarantee institutions
• +7 more outcomes

Named customers10 records

Segments3 records

Ideal customer profiles3 records

Technology focussed No

API detail

Has API

No

API docs

API detail

Core technology

AI maturity

App detail

Integration4 records

Feature4 records

Partnerships

13 partnerships are on record, tiered core, major and minor.

• KB손해보험 (KB Insurance)coreOthersPartnership with KB손보 through a business agreement to provide group insurance products (personal information protection liability compensation, software damage compensation, regulatory sandbox liability, worker accident compensation) to KSFC members and associate members. KB손보 has RBC ratio above 150% with strong financial soundness and annual recognition as an excellent insurance company.
• 삼성화재해상보험 (Samsung Fire & Marine Insurance)coreOthersPartnership with 삼성화재 through a business agreement to provide group insurance products to KSFC members. 삼성화재 has RBC ratio above 150% with strong financial soundness and annual recognition as an excellent insurance company.
• DB손해보험 (DB Insurance)coreOthersPartnership with DB손보 through a business agreement to provide group insurance products to KSFC members. DB손보 has RBC ratio above 150% with strong financial soundness and annual recognition as an excellent insurance company.
• 조달청 (Public Procurement Service / G2B)coreTechnology or IntegrationElectronic guarantee linkage through G2B system. Contract information is transmitted electronically and guarantees are issued directly to the government procurement portal. Partnership dates to August 2001 when KSFC entered into an agreement with Public Procurement Service about electronic guarantee.
• 한국철도공사 (Korea Railroad)majorTechnology or IntegrationElectronic guarantee linkage through B2B system. KSFC issues guarantees and transmits them directly to Korea Railroad for their IT/software contracts.
• 한국수자원공사 (Korea Water Resources Corporation)majorTechnology or IntegrationElectronic guarantee linkage through B2B system for software contracts.
• 한국전력공사 (Korea Electric Power Corporation)majorTechnology or IntegrationElectronic guarantee linkage through dedicated KEPCO system. For KEPCO contracts, users select KEPCO as guarantee creditor and enter the public notice number.
• 삼성SDS (Samsung SDS)majorTechnology or IntegrationB2B electronic guarantee linkage. KSFC issues guarantees and transmits them directly to Samsung SDS for their IT/software procurement contracts.
• LG CNS (LG CNS)majorTechnology or IntegrationB2B electronic guarantee linkage. LG CNS can request guarantee issuance through its own procurement system and KSFC transmits guarantees electronically.
• 에스케이 (SK)majorTechnology or IntegrationB2B electronic guarantee linkage for SK group companies (SK Telecom, SK C&C).
• 한국평가데이터 (Korea Evaluation Data / KOfind)majorTechnology or IntegrationPartnership with KOfind (data.kofind.co.kr) for electronic submission of financial and tax documents required for credit evaluation. KSFC members submit 9 types of national tax office documents including financial statements, corporate tax filings, and VAT records through the KOfind platform.
• MegaZone (메가존)minorStrategic or Co-development PartnerKSFC member company. MegaZone signed MOU with Tesolo (테솔로) for physical AI technology cooperation and talent development, as reported in KSFC member news.
• Veeam SoftwareminorChannel Partner/ Reseller/ DistributorVeeam established an official distribution partnership with Ability Systems (어빌리티시스템즈), a KSFC member, for the domestic data protection market, as reported in KSFC member news.

Scale indicators8 records

Recent moves12 records

Expansion highlights5 records

Broad incumbents

• Korea Development Bank (KDB): Korean policy bank providing corporate finance and guarantee support, including technology and software sector financing, competing with KSFC for large-scale software industry deals.
• Shinhan Bank: Major Korean commercial bank with a substantial SME and IT sector lending franchise; competes with KSFC on working capital loans, guarantees, and digital onboarding for software companies.
• Korea Credit Guarantee Fund (KODIT): Korea's largest government-backed credit guarantee fund serving SMEs across all industries, providing a broader, more established counterpart to KSFC's industry-specialized guarantee services.
• Industrial Bank of Korea (IBK): Korea's SME-focused policy bank that competes with KSFC for the same SME software/IT customer base, providing working capital loans and trade guarantees at scale.
• Korea Venture Investment Corporation: Korean government-linked venture and growth capital provider that, like KSFC, deploys capital into technology/software companies, overlapping on KSFC's capital investment and growth-stage software financing activities.

Others

• KB Capital: Korean financial services affiliate of KB Financial Group that operates in adjacent lending, leasing, and credit services for SMEs, an ecosystem participant that may partner with or compete against KSFC's member financing offerings.
• Korea Software Industry Association (KSIA / SW 산업협회): The industry trade body from which KSFC historically originated (mutual aid services began under KSIA in 1997); KSIA remains an ecosystem partner that links KSFC's member companies with policy and industry programs.
• National IT Industry Promotion Agency (NIPA): Korean government agency under the Ministry of Science and ICT that supports IT industry development alongside KSFC, overlapping on policy initiatives, software industry promotion, and ecosystem development.

Direct peers

• Korea Technology Finance Corporation (KOTEC): Korean government-affiliated technology credit guarantee institution that provides guarantees and technology financing to SMEs, directly comparable to KSFC's mandate to support Korean technology and software firms with credit guarantees.
• Small Business Credit Guarantee Fund: Korean government-affiliated credit guarantee organization providing guarantees to small and medium enterprises, structurally similar to KSFC as a public-sector guarantee institution with mandate-driven lending.

Market position

Strengths5 records

Weaknesses5 records

Competitive moat5 records

Key risks6 records

Key highlights7 records

Customer concentration

Compliance5 records

Revenue estimate

Valuation estimate

Number of profiles

Profiles11 records

Funding overview

Funding rounds

Investors

Funding detail is available on the Subscription and Enterprise plan.Contact sales →

M&A

Investments

M&A and investment is available on the Subscription and Enterprise plan.Contact sales →

Frequently asked questions about Korea Software Financial Cooperative