Dongho Kim CEO of Korea Credit Data (KCD) ⓒPlatum
Korea Credit Data(KCD) will establish a specialized bank for micro enterprises.
Korea Credit Data announced its intention to establish a specialized bank for microenterprises, saying, “We will help microenterprises and sole proprietorships (individual businesses) receive fair evaluation and timely financing with three-dimensional data that reflects the actual business status.”
Korea Credit Data provides various services and digital infrastructure such as business management, credit information, information provision, and payment to 2 million microenterprises and self-employed people nationwide, with the business management service “Cashnote” introduced to 1.3 million businesses.
Dongho Kim, CEO of KCD, said, “Access to finance for small businesses is still limited. “The specialized microenterprise bank promoted by Korea Credit Data aims to reflect sales capabilities in three dimensions by capturing sales performance such as customer ratio and hourly sales distribution of unit price in near real time,” said Kim.
Korea Credit Data has been striving to provide the best financial services optimized for micro businesses. Together with Kakao Bank, Seoul Guarantee Insurance (SGI), and KB Kookmin Bank, it established “Korea Credit Service (KCS)”, the country’s first dedicated credit bureau for sole proprietorships, and was approved by the Financial Services Commission in 2022. KCS has developed a credit rating model based on sole proprietors’ business information and provides it to a number of financial institutions.
According to Korea Credit Data, the aim is to increase the supply of credit to microenterprises through banks that specialize in small businesses. “For existing financial institutions, low- and middle-income sole proprietors are not their main customers, so there are limitations in providing customized services to them,” Kim said. “To strengthen financial services for micro enterprises, it is necessary to establish a differentiated specialized bank that provides customized financing for micro enterprises.”
The specialized micro enterprise bank promoted by Korea Credit Data will have a high level of risk management and financial stability through cooperation with large financial companies. The establishment of a specialized microenterprise bank is aimed at providing optimal financial services to microenterprises. The timing and method of application for approval will be determined through further discussions.
Dongho Kim, CEO of Korea Credit Data, said, “We are preparing a way for micro enterprises to receive more support relative to their asset size by connecting various financial institutions and policy organizations, rather than focusing on lending money directly.” “Considering that the essence of the financial industry is risk management, we are in the process of forming a consortium to fully ensure business plans and soundness,” he stressed.
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