KakaoPay will team up with SBI Savings Bank and Korea Credit Bureau (KCB) to develop financial products for mid-to-low credit borrowers and people with limited credit histories using the alternative credit scoring model KakaoPay Score.

KakaoPay said on Sept. 17 it signed a memorandum of understanding with SBI Savings Bank and KCB on Sept. 16 at its Pangyo office in Gyeonggi Province for a strategic partnership to expand inclusive finance based on alternative credit scoring.

Under the agreement, SBI Savings Bank plans to incorporate KakaoPay Score into its lending review strategy and process and, based on it, develop and run dedicated financial products for mid-to-low credit borrowers and people with limited credit histories.

KakaoPay will handle brokerage of the related products and customer contact through its platform. KCB, as a specialist credit rating institution, will provide analysis and consulting on KakaoPay Score to support upgrading the model.

KakaoPay Score is an alternative credit scoring model that uses remittance and payment data and MyData-based asset information.

The company said the model is currently used in lending review strategies at financial companies such as internet-only banks, card companies and savings banks, and is also applied to Korea Housing Finance Corp's lease loan guarantee process.

The three companies plan to identify additional cooperative projects to improve the alternative credit scoring model, develop dedicated financial products and increase financial access for mid-to-low credit borrowers and people with limited credit histories.

Shin Won-geun (신원근), CEO of KakaoPay, said, "The value of alternative credit scoring lies in providing new financial opportunities to users who were hard to adequately assess using only existing credit information."