Number of Banks Participating in Small Business Credit Evaluation System Expands to 16... Applied to 2.2 Trillion Won in Loans

Pilot Program Expands from 1.8 Trillion to 2.2 Trillion Won
Sequential Implementation Begins Late August
SCB to Be Applied to Saiteol Loan in October and Local Credit Guarantees Next Year

The number of banks participating in the pilot operation of the Small Business Credit Evaluation System (SCB), which will be implemented starting next month, will expand from the current 7 to 16. In addition, following the launch of the Saiteol Loan exclusively for sole proprietors scheduled for October this year, the SCB will also be applied to guarantee screenings at local Credit Guarantee Foundations starting next year.

According to the Financial Services Commission on July 27, a meeting was held under the direction of Secretary General Shin Jinchang, including the 'Inclusive Finance Strategy Task Force' subcommittee on credit infrastructure and the 7th Task Force for Revision of the Credit Evaluation System, where these plans were discussed.

Initially, the pilot operation of SCB was to be conducted by 7 banks—IBK, KB Kookmin, Shinhan, Woori, Hana, NongHyup, and Jeju Bank. However, the Financial Services Commission has decided to expand the participating banks to include Suhyup Bank, K Bank, KakaoBank, Toss Bank, iM Bank, Busan Bank, Kyongnam Bank, Gwangju Bank, and Jeonbuk Bank as well.

As a result, the pilot’s scope will expand from business loans worth 1.8 trillion won to 2.2 trillion won. The original group of participating banks will begin applying the SCB from the end of August, while the additional banks will adopt the SCB sequentially within the second half of this year, according to their level of readiness. The SCB is an AI-based credit evaluation model that utilizes non-financial information such as sales, commercial district, business type, and business history to assess the future growth potential of small business owners.

The Financial Services Commission also decided to apply the SCB to the Saiteol Loan for sole proprietors, which is being prepared for launch in October. Previously, the Commission announced plans to launch the Saiteol Loan in October, which will reflect the characteristics of sole proprietors by incorporating non-financial information such as business type, business history, and sales amount in its screening process. The limit for the Saiteol Loan will be increased from 20 million won to 30 million won per borrower, and the annual supply scale will be raised from 100 billion won to up to 150 billion won.

From next year, the Financial Services Commission also plans to adopt the SCB in guarantee screening by local Credit Guarantee Foundations. The current system, which is centered on financial and credit ratings, will be revised to include non-financial information such as commercial district data, enabling a more comprehensive assessment of growth potential.

Furthermore, relevant regulations and guidelines will be prepared to ensure that SCB is actively adopted and utilized by banks and financial institutions during loan screening for small business owners. The Commission announced its intention to revise the 'Credit Information Business Supervision Regulation' and the banking sector’s 'Credit Screening Guidelines for Sole Proprietor Loans' in August, and also prepare an operational guideline containing the SCB’s implementation procedures and employee exemption standards, to facilitate effective adoption of the system.

Shin Jinchang, Secretary General of the Financial Services Commission, emphasized, “Inclusive finance extends beyond supporting the socially vulnerable—it is a core mechanism for expanding opportunities for innovation and growth, thereby underpinning the sustainable development of our economy. A small business-only credit evaluation system that leverages AI to reflect the future growth potential of small business owners represents the target for financial paradigm reform that encompasses both inclusion and innovation.”

During the meeting, there were also suggestions to shorten the registration and sharing period of public records (currently five years) for individuals who have declared bankruptcy or been granted debt discharge, in order to support quicker return to economic activity. However, some also argued that, unlike rehabilitation, bankruptcy and discharge completely write off all debt, so the potential for moral hazard and practices abroad should be carefully considered. The Commission plans to review possible improvements following further discussions.

This content was produced with the assistance of AI translation services.