NAVER FINANCIAL Launches Guaranteed Loan Program for Online Businesses, the First of its Kind, with IBK and KODIT
NAVER FINANCIAL Launches Guaranteed Loan Program for Online Businesses, the First of its Kind, with IBK and KODIT
NAVER FINANCIAL Launches Guaranteed Loan Program for Online Businesses, the First of its Kind, with IBK and KODIT
- In response to a tripartite MOU signed in March, NAVER FINANCIAL introduces the loan program that supports online SMEs struggling with high thresholds for guaranteed loans using nonfinancial data
- The loan program offers preferential interest rates using alternative information, an industry-first entirely remote procedure, and minimized repayment burden for businesses
June 27, 2023
NAVER FINANCIAL (CEO Park Sang-jin) launched an industry-first guaranteed loan program for online small and medium enterprises (SMEs) in collaboration with the Industrial Bank of Korea (IBK, CEO Kim Seong-tae) and the Korea Credit Guarantee Fund (KODIT, CEO Choi Won-mok).
The newly launched “Guaranteed Loan for Success of E-commerce SMEs” helps address the financial challenges faced by online SMEs. Despite having excellent growth potential, they have difficulty securing guaranteed loans due to the absence of physical stores and a short operational history. To this end, the new loan program utilizes a range of nonfinancial data from Smart Stores for credit evaluation and conducts the entire loan process remotely. The three parties signed a memorandum of understanding (MOU) in March, marking the first instance of collaboration involving a policy financial institution and a fintech company to support online SMEs.
Compared to existing business loans, the eligibility criteria have been significantly tempered. Any business that has been operating on NAVER’s Smart Store for over six months is eligible to apply, and even businesses with limited financial information or credit history can apply for a loan.
To provide a more favorable credit line and interest rate for businesses, the program uses nonfinancial data to evaluate the potential for business growth. Both the IBK and KODIT use nonfinancial data generated in the Smart Stores, including sales, repurchase rate, and return rate, when evaluating for loan and guarantee, providing preferential interest rates from a minimum of 1% to a maximum of 1.5% and deducting up to 0.3%p from the guaranteed rate.
The loan limit is up to KRW 100 million (including the remaining balance of existing KODIT guarantees), and the repayment period has been extended from five years to a maximum of eight years, including a three-year grace period, thus minimizing the repayment burden on businesses.
Moreover, for the first time for a guaranteed loan, the entire loan process, from application to review and execution, is conducted remotely. This greatly reduces the required time compared to regular guarantee procedures; online document submission is also possible. When a Smart Store owner applies for a loan through the “NAVER Business Financial Center,” the IBK administers the loan evaluation, and KODIT conducts a virtual interview and guarantee evaluation prior to the final approval.
“From using nonfinancial data in the evaluation process to introducing a remote system for the procedure, this program is the result of the three parties’ joint effort to alleviate the difficulties of online businesses that were in the blind spot of policy finance benefits,” said a NAVER FINANCIAL representative. “We will continue to introduce innovative services to address difficulties in the financial sector based on data and information technology (IT)." <END>