Shinhan bank eases funding for Korean small businesses
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Shinhan Bank in South Korea is providing financial relief to approximately 280,000 individual business owners by refunding 195.3 billion won (about $146 million USD) in interest payments.
The bank began by directly returning interest paid on loans, giving each eligible business owner around 700,000 won (approximately $525 USD). They expanded this support to include a new approach to credit evaluations. Shinhan Bank now considers over 1700 data points when assessing the creditworthiness of small businesses, moving beyond traditional financial history.
These data include sales figures, business type, location, and actual operational information. This allows the bank to offer better loan terms, increased limits or lower interest rates, to businesses demonstrating strong performance, even if they have limited credit history. The bank specifically focused on delivery businesses, incorporating order, sales, and coupon data from the “Baemin” delivery platform into its credit scoring.
Businesses with positive evaluations from this data can improve their internal credit rating, potentially unlocking access to loans they previously couldn’t obtain. For example, some businesses previously excluded due to low credit scores received loan approval after the new data was considered. Shinhan Bank offers loans up to 100 million won (around $75,000 USD) to qualifying businesses with monthly sales exceeding 10 million won (approximately $7,500 USD).
