Card Companies Expanding Personal Business CB, Will It Become a New Revenue Source?

Seeking New Opportunities with a Credit Evaluation Model for Sole Proprietors

[Image source=Yonhap News]

[Asia Economy Reporter Ki Ha-young] As card companies actively expand their credit evaluation (CB) business for individual entrepreneurs, they are expected to enter the self-employed loan market.

According to the industry on the 16th, following Shinhan Card's recent acquisition of the preliminary license for individual entrepreneur CB?the first in the financial sector?KB Kookmin Card and BC Card, which have also submitted preliminary license applications to financial authorities, are expected to receive approvals sequentially. Other card companies are also reviewing related service models.

Card companies have been operating pilot projects for individual entrepreneur CB since 2019 through the Financial Services Commission's innovative financial services. Shinhan Card launched the service 'MyCredit,' while KB Kookmin Card and BC Card introduced 'CreditTree' and 'BizCredit,' respectively.

The card industry expects to provide accurate credit evaluations for individual entrepreneurs using big data owned by card companies, such as merchant sales data, thereby expanding the loan market and generating demand for consulting. Until now, individual entrepreneurs have received relatively low credit ratings due to a lack of information in the existing credit evaluation system and have been marginalized in the financial loan market. With more sophisticated credit evaluations, loan interest rates for individual entrepreneurs could also decrease. For card companies, the individual entrepreneur CB business is a venture that can achieve both strengthening financial support for vulnerable groups and securing potential customers.

In particular, through credit evaluation models, card companies are expected to pioneer a new market for self-employed loans. According to the Bank of Korea, as of the end of March, self-employed loans amounted to 831.8 trillion won. Financial authorities are also emphasizing the activation of mid-interest loans, leading to increased demand for CB services targeting the self-employed.

However, since internet-only banks like KakaoBank and fintech companies such as Naver Financial have also entered the CB service market linked to self-employed loans, competition is expected to become even more intense in the future.

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