[DigitalToday reporter Lee Ji-young] KakaoBank said on Tuesday it will cut interest rates on its real estate-secured loans for sole proprietors by up to 0.75 percentage points from March 17 to reduce financial burdens for small business customers.

It will lower loan rates by up to 0.60 percentage points and expand preferential rate discounts to 0.30 percentage points a year from 0.15 percentage points. Applying both the rate cut and the preferential discount brings the minimum rate to 2.895 percent. KakaoBank is the only bank in South Korea’s financial sector currently offering rates in the 2 percent range for real estate-secured loan products for sole proprietors.

KakaoBank’s real estate-secured loan for sole proprietors, launched in October last year, can be used online up to 1 billion won for various funding purposes such as business operating funds and funds to purchase business premises. Some sectors, including residential building development and supply and residential building rental, are excluded from eligibility.

KakaoBank added a bullet repayment option in February as a repayment method for the loan and added a three-year maturity product as a loan term, among other steps, as it has continued efforts to ease the financial burden on small business owners and expand their options.

KakaoBank said, "We lowered interest rates further on real estate-secured loans for sole proprietors to expand financial support for small business owners who are struggling to raise funds." It added, "We will continue to introduce various innovative financial services to improve convenience for sole proprietor customers."