Busan Bank Lowers Lending Barriers for Promising Small Businesses

[Financial News] Small business owners in the Busan area with strong growth potential will soon be able to obtain larger loans from banks through specialized credit assessments. Busan Bank has decided to become the first regional bank to introduce the Small Business Credit Bureau (SCB) model, promoted by the Financial Services Commission (FSC), into its loan products. The move aims to improve small businesses’ access to finance and establish a more sophisticated credit assessment system.
According to Busan Bank on the 2nd, the Small Business Credit Bureau (SCB) model combines existing personal credit assessment data with various nonfinancial information, including small businesses’ sales and commercial-area conditions. This enables a more detailed assessment of the characteristics of individual business owners.
While conventional loan reviews and interest-rate decisions have focused primarily on credit scores provided by credit rating agencies, SCB also uses business information and commercial-area analysis. Its distinguishing feature is a comprehensive assessment of small business owners’ future repayment capacity and growth potential.
At the end of last month, Busan Bank revamped its existing ONE Credit Loan—SOHO Mid-Interest Loan as the ONE Credit Loan—SOHO Growth Loan and began offering interest-rate discounts based on SCB grades. The bank plans to reduce small business owners’ financial burden by providing customers in the top SCB grades with an interest-rate discount of up to 0.3 percentage points.
Busan Bank also plans to expand its use of SCB in stages. It will apply the model to the assessment of a collateralized loan exclusively for small businesses, scheduled to launch in the second half of the year, as well as to interest-rate decisions based on SCB grades. The bank also plans to participate in the Sa-itdol Loan for individual business owners being promoted by the FSC.
Through these measures, Busan Bank plans to expand financial support tailored to the business stage and credit characteristics of each customer, from early-stage small businesses to those that have entered a stable growth phase.
Busan Bank President Kim Sungjoo said, "With the introduction of SCB, we can examine more closely the business performance and growth potential of small businesses that have been difficult to assess adequately using only their existing financial transaction information. We will continue expanding SCB-based loan products and broadening financial support in line with inclusive finance policies, including by participating in the Sa-itdol Loan for individual business owners. We will also continue serving as a reliable partner to the local economy."
The FSC began introducing the SCB model in stages to 16 banks at the end of last month. Busan Bank was the first regional bank to apply it to loan products and plans to continue expanding the scope of its SCB use.
[email protected] Kwon Byung-seok Reporter