Major South Korean banks will begin a pilot run from August of a small business tailored credit rating model, in line with the Financial Services Commission\'s credit evaluation system overhaul. Banks plan to apply SCB grades to loan reviews to offer benefits such as preferential rates and higher limits. The model is designed to move beyond collateral and past credit history by factoring in non-financial data such as sales, industry and growth potential.

South Korea plans to let small business owners with limited credit histories seek bank loans using AI-based credit assessments built on non-financial data such as sales, business type and trade area conditions. The Financial Services Commission unveiled a small business-focused credit assessment system that grades growth prospects in 10 tiers and can lift existing credit ratings. Seven banks will pilot it from August in loan screening worth about 1.8 trillion won, with expansion planned later.