[Digital Today reporter Ji-young Lee] Small merchants with high future growth potential will be able to receive preferential treatment in bank loan screening, including loan limits and interest rates.

The Financial Services Commission said on Sept. 2 that eight banks — Kookmin, IBK, NongHyup, Busan, Shinhan, Woori, Jeju and Hana — began a pilot programme on Aug. 31 for a small-merchant specialised credit evaluation model, or SCB.

SCB is an AI-based credit evaluation method that assesses small merchants' future growth potential using non-financial information such as sales, business sector, commercial district, business continuity, years in operation and number of employees. It additionally reflects business growth potential in loan screening, which was difficult to fully capture under assessments centred on existing financial transaction history.

Small merchants with high growth grades can apply a growth credit grade that is higher than their existing credit grade, and receive benefits such as loan approval, higher limits and lower interest rates.

Banks participating in the pilot will increase to 16 from an initial 7, and the target supply 규모 will expand to 2.2 trillion won from 1.8 trillion won. Another eight banks — Kyongnam, Gwangju, Suhyup, iM, Jeonbuk, KakaoBank, K Bank and Toss Bank — are also set to join in stages by the end of the year.

The FSC plans to expand the loan products to which it is applied after about 1 year of pilot operations.