KakaoBank will join hands with the Seoul Credit Guarantee Foundation to provide financial support worth 125 billion won for small merchants in Seoul.

KakaoBank said on Wednesday it will make a 10 billion won special contribution to the Seoul Credit Guarantee Foundation and, based on it, supply guaranteed loans worth a total of 125 billion won.

The two institutions held a signing ceremony on Tuesday at KakaoBank's Pangyo office in Seongnam, Gyeonggi Province, and began cooperation to ease the financial burden of small merchants in Seoul.

Under the agreement, KakaoBank plans to provide 62.5 billion won to the 'Rapid Financial Support' programme run with the Seoul city government, and 62.5 billion won to the 'District Local Economy Close Support' programme linked with Seoul's 25 district governments.

The 'Rapid Financial Support' programme consists of a special contribution guarantee product of up to 100 million won and the 'Rapid Dream' product, which supports up to 30 million won for self-employed borrowers with credit scores of 839 or below (NICE standard).

The 'District Local Economy Close Support' programme supports loans of up to 100 million won for small merchants located in each of Seoul's districts. This is the first time an internet-only bank has collaborated with all 25 districts in Seoul.

A KakaoBank official said, "We will continue to expand financial support for individual business owners and put inclusive finance into practice."