Regional Credit Guarantee, Non-Face-to-Face Guarantee Without Visits or Documents Starting in July

Small Business Owners Can Apply and Receive Same-Day Loans via Bank App Without Visiting Branches

[Asia Economy Reporter Kim Jong-hwa] The Korea Credit Guarantee Fund (KCGF) announced on the 18th that it plans to introduce 'Untact (non-face-to-face) guarantees' without the need for visiting banks or submitting documents starting in July.

In response to the changing non-face-to-face culture due to the novel coronavirus disease (COVID-19) and to provide prompt guarantee support to small business owners, the KCGF, on behalf of 16 regional credit guarantee foundations, signed a business agreement on the 15th with five major commercial banks?Kookmin, KEB Hana, Shinhan, Woori, and IBK?to promote new untact guarantee and loan services. An additional agreement with NongHyup Bank is scheduled for the end of January.

Through this agreement, signed on behalf of the 16 regional credit guarantee foundations, the regional credit guarantee foundations and commercial banks will cooperate to jointly develop untact guarantee and loan financial products, operate IT systems, exchange information, and build networks. To this end, a permanent 'Untact Guarantee Task Force' composed of practical personnel from each bank and the KCGF will be operated.

Following the three internet-only banks?Kakao Bank, K Bank, and Toss Innovation Preparation Corporation?that signed a business agreement in June last year, it is expected that commercial banks will sequentially launch financial products using untact channels in the second half of the year.

Additionally, the inconvenience faced by small business owners, who had to wait in long lines and endure loan processing times of one to two months due to the surge in guarantee demand caused by the spread of COVID-19 and insufficient manpower, is expected to disappear.

Once the agreement is implemented and 'Untact Guarantees' are introduced from July, rapid and accurate guarantee screening will be conducted through a digitized system without documents, and untact guarantee certificates and loan agreements will be prepared using electronic signatures, enabling small business owners to receive funds on the same day as their application.

Kim Byung-geun, Chairman of the KCGF, stated, "The regional credit guarantee foundations plan to supply 25 trillion won in guarantees this year to actively respond to the financial difficulties faced by small business owners due to the prolonged social distancing." He added, "This year as well, the regional credit guarantee foundations will make every effort to fulfill their role as a true partner to help self-employed individuals overcome hardships."

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