Finance

Small business credit scores to factor in sales, trading areas; 16 banks to apply 2.2 trillion won

A new credit scoring system for small business loan screening will start operating from late August, evaluating future growth potential using data such as sales, local trading areas, employment and online activity in addition to the owner’s past financial history. The scope will expand from 7 banks and 1.8 trillion won to 16 banks and 2.2 trillion won. Authorities also plan to use the model for a dedicated loan product and future guarantee reviews.

Finance

Banks to ease conditions for discounted loan rates, recognise debit card spending the same

South Korea\'s Financial Supervisory Service said on Tuesday it will work with banks to improve how card spending is calculated for loan rate discounts and to narrow excluded items. Banks will provide clearer guidance in loan contracts and on digital channels, and notify long-term borrowers at least once a year. Exclusions will be cut to about 0 to 1 item per bank. Debit and credit card spending will be treated the same, and instalment payments will be counted monthly over the instalment period.