KakaoBank said on Wednesday it will launch the third phase of its 'Relief Account' programme in cooperation with the Seoul Credit Guarantee Foundation from March 19.

The Relief Account is a non-face-to-face guaranteed loan in the form of an overdraft-style credit line. KakaoBank and the Seoul Metropolitan Government first introduced it in March last year through the first phase of the programme, the first such product in the financial sector. Borrowers can draw and repay funds as needed within the initial approval period and limit, providing help to small business owners who need emergency funds.

Through the third phase following the first and second, an additional 200 billion won in loans is expected to be supplied to 20,000 sole proprietors. Eligible borrowers are self-employed people who have operated a business in Seoul for more than 1 year and meet the following conditions: the owner's credit score is at least 600 points under NICE 기준, and total sales over the past 3 months are at least 2 million won or reported annual sales are at least 10 million won. The loan limit is 10 million won.

In the third phase, some screening criteria will be eased for young business owners. Young entrepreneurs whose representative is 39 or younger and who have at least 3 years of business history can receive eased screening standards related to card loans and cash advances.

Customers who sign up for KakaoBank's Relief Account can also receive support covering half of the guarantee fee. KakaoBank supported a total of 25 billion won in guarantee fees from the launch of its guaranteed loans in May 2023 through the end of last year, and it will offer the same half-fee support benefit to customers who sign up for this Relief Account.

KakaoBank is the only bank to take part in all 3 phases of the Relief Account programme. Through the first and second phases, about 40,000 small business owners received a total of 400 billion won in loans. With other financial companies also participating, 260 billion won, or 65 percent of the total loan amount, was executed through KakaoBank.