[Exclusive] Jungjin Gong, Introducing AI Prediction Model into Corporate Evaluation Framework

Plans to Promote After Testing Through Research Service to Enhance the Effectiveness of Policy Fund Support for Small and Medium Venture Enterprises

Panorama of the Small and Medium Business Corporation

[Asia Economy Reporter Kim Daeseop] The Small and Medium Business Corporation (SBC) plans to introduce artificial intelligence (AI) technology into its corporate evaluation model for policy fund support as early as January next year. They will create a credit risk prediction model using big data, apply it on a trial basis, and later incorporate it into on-site inspection evaluations such as technological feasibility.

On the 26th, SBC announced that it is reviewing the application of an AI prediction model to the corporate evaluation model to enhance the effectiveness of policy fund support for small and medium enterprises.

The core of this corporate evaluation model reform is to establish an effective support evaluation system in response to the changing environment with increasing non-face-to-face (untact) economic activities and the rise in policy fund budgets. The plan is to complete the research service by November this year and proceed after testing.

SBC’s corporate evaluation system generally conducts a comprehensive assessment focusing on technological feasibility, business viability, policy purpose, and management capability to determine the corporate evaluation grade. The decision to provide policy fund loans is made for companies that meet a certain evaluation grade or criteria based on the corporate evaluation results.

When calculating the corporate evaluation grade, due to the nature of policy fund support institutions, evaluations of technological feasibility, business viability, and policy purpose account for more than 80%. Evaluations of financial statements and corporate creditworthiness are reflected with relatively low weight.

In the upcoming corporate evaluation model reform, a plan is being prepared to pilot the application of credit risk evaluation, such as financial statements and corporate creditworthiness, which currently have low weight in determining the corporate evaluation grade. This involves collaborating with external credit rating agencies and utilizing AI-based big data analysis technology to predict credit risk during corporate evaluations or to modify indicators with low discriminative power.

SBC is considering applying parts of the AI prediction model to on-site inspection evaluation items in line with the shift to an untact economy if the AI prediction model is judged to have high expertise or usability through testing.

The corporate evaluation model reform will also include research on ▲simplification of corporate evaluation ▲improvement plans for policy purpose ▲standardization of corporate evaluation reports ▲corporate evaluation training programs ▲and measurement of the influence of credit risk grade evaluation.

SBC is also promoting the introduction of a big data and AI-based interactive counseling processing solution. This will be applied to policy fund consultations currently conducted through 32 regional headquarters and branches nationwide.

SBC is a quasi-governmental organization established to efficiently promote projects for the advancement of small and medium enterprises. It operates a startup and promotion fund for small and medium ventures worth approximately 19 trillion won. This year, the policy fund loan budget is 5.69 trillion won, an increase of 1.332 trillion won compared to last year’s budget of 4.358 trillion won.

An SBC official said, "We will improve the reliability of the corporate evaluation model and clarify the measurement objectives by improving evaluation criteria suitable for the actual conditions of policy fund-supported companies," adding, "We also plan to develop a systematic program to train corporate evaluation experts."

This content was produced with the assistance of AI translation services.