KakaoBank said on Thursday it launched a '3-no overdraft account' with the Busan Credit Guarantee Foundation to support small merchants in Busan.

The product is a non-face-to-face guaranteed loan in the form of an overdraft account. It was designed as part of Busan city's '3-no Hope Link Card special guarantee' programme. KakaoBank plans to provide loans totalling 200 billion won to about 40,000 small merchants through the product.

Eligible borrowers are Busan-based sole proprietors with a personal credit score of at least 595 points for the business owner under NICE standards and either 3 million won or more in sales over the past three months, or at least 12 million won in annual sales. The loan limit is 5 million won per company.

The product has no guarantee fee, no branch visit process and no limit review process. KakaoBank will cover the entire guarantee fee incurred when the loan is executed, and applications can be made without visiting a branch through the KakaoBank app. If the review finds that the borrower meets the loan conditions, a 5 million won limit is granted without a separate limit review.

KakaoBank and Busan city have also continued cooperation through tailored financial programmes including interest support, support for nine strategic industries and growth partnership support. They plan to expand financial support for small merchants in Busan in the future.

A KakaoBank official said, "We planned this product in cooperation with Busan city and the Busan Credit Guarantee Foundation to ease the financial burden for small merchants in Busan and improve convenience." The official added, "We will continue to expand financial support for sole proprietors based on financial technology and contribute to revitalising the local economy."