Federation Welcomes SCB Introduction: "A New Era Where Small Business Owners' Efforts Are Recognized"

Comprehensive Evaluation Incorporating Non-Financial Data

The small business community has expressed strong support for the Financial Services Commission's introduction of a 'Small Business Credit Bureau' (SCB) credit evaluation system.

(Sixth from the left) Chi Young Song, Chairman of the Korean Federation of Small and Medium Business, is attending the "Credit Evaluation System Reform Task Force (TF) Meeting" held on the 9th at the Bankers Hall in Myeong-dong, Jung-gu, Seoul, and is taking a commemorative photo. Photo by Korean Federation of Small and Medium Business

On April 9, the Federation of Small and Medium Businesses issued a statement saying, "We believe the SCB will serve as a catalyst for eliminating the real financial blind spots," and added, "This is the result of the government reflecting the voices of small businesses in the field."

On the same day, the Financial Services Commission held a 'Credit Evaluation System Reform Task Force (TF) Meeting' at the Bankers Hall in Myeongdong, Jung-gu, Seoul, and announced a plan to introduce a credit evaluation system tailored for small businesses. The event was attended by Financial Services Commission Chairman Lee Eogwon, as well as other financial authorities, representatives from major commercial banks, officials from the Ministry of SMEs and Startups, and Chi Young Song, President of the Federation of Small and Medium Businesses, who participated as the representative for policy stakeholders.

The introduction of the SCB was a key demand voiced by small business owners at the Financial Services Commission's on-site meeting organized by the Federation on July 17 of the previous year. For the past 10 years, the Federation has consistently requested the establishment of a credit evaluation model dedicated to small businesses.

Until now, small business owners have been evaluated solely based on the 'personal credit score of the business owner,' rather than the growth potential or integrity of the business itself. The Federation expects that the introduction of this new system will serve as a turning point to reform past unreasonable credit practices.

The core of the SCB announced by the Financial Services Commission is an artificial intelligence (AI)-based evaluation focused on 'future growth potential.' Instead of relying only on debt repayment history, the system aims to comprehensively analyze non-financial data such as ▲ sales trends ▲ business history ▲ industry-specific characteristics ▲ visitor numbers, and derive a growth rating.

This will enable more sophisticated assessments tailored to different industries such as retail, wholesale, accommodation, and food services, allowing outstanding small businesses to receive a higher credit rating, such as an 'S grade,' than previously possible.

Additionally, the Federation highly appreciated the establishment of institutional measures to encourage financial institutions to actively support small businesses, such as ▲ amendments to supervision regulations ▲ an employee immunity system ▲ inclusive finance evaluation incentives.

President Song stated, "We are entering an era where the hard work of small business owners will be recognized as credit and receive their fair value," and expressed gratitude to the officials of the Financial Services Commission and the Ministry of SMEs and Startups for their efforts. He added, "While pilot operations and improvements will be necessary for the system to become fully established, the Federation will provide maximum support to ensure the SCB works effectively in the field."

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