Shinhan Bank Restructures "Ttaenggyeoyo" Mutual Growth Loans: Shifting from Small Loans to Expanding Interest Subsidies

‘Daily Ttaenggyeodream’ Loan to Be Discontinued Next Month After Three Years
Low Product Appeal Leads to Poor Sales Performance
Business Loan Launched in the Same Year Also Set for Restructuring
Interest Subsidy Loan Launched in July Gains Momentum... Coverage Area to Expand

Shinhan Bank is restructuring its mutual growth loan products for small business owners registered on the public delivery app "Ttaenggyeoyo." As this initiative is becoming a leading model for mutual growth in the financial sector, the bank aims to strengthen financial support measures that provide practical assistance to participating businesses.

According to the financial industry on September 18, Shinhan Bank will discontinue sales of the "Small Business Mutual Growth Daily Ttaenggyeodream Loan" starting October 15.

Launched in 2022, this product was a short-term, small-amount loan designed for small business owners registered on "Ttaenggyeoyo." These business owners could borrow up to 3 million won per day at interest rates ranging from 5% to 8%, and the loan would be automatically repaid through a linked account after three business days without any early repayment penalty. The product was notable at the time of its launch for being the first in the banking sector to offer a structure tailored to small business owners who require daily funding, allowing loans to be taken out on a daily basis.

However, contrary to expectations, there were not many small business owners utilizing the product, and ultimately, the decision was made to discontinue it. It is reported that the product did not exceed 100 sales in the three years since its launch.

The introduction of alternative loan products, such as the "Ttaenggyeoyo Interest Subsidy Loan" in July, also appears to have influenced this decision. This product is a low-interest working capital loan linked to guarantees from regional credit guarantee foundations and support from local governments. Shinhan Bank provides special contributions to regional credit guarantee foundations, supporting both the loan interest and guarantee fees for registered small business owners. These business owners can borrow up to 100 million won, with a preferential interest rate reduction of 1 to 2 percentage points.

Launched first in Seoul in July, this product saw 128 cases executed, totaling approximately 7.3 billion won within just one month. Since then, the coverage has expanded to Busan, South Chungcheong Province, and Daejeon, with a total loan limit set at 53.8 billion won to date.

In addition, since 2022, Shinhan Bank has been operating the "Ttaenggyeoyo Business Loan," which allows for non-face-to-face loans of up to 10 million won.

Going forward, the mutual growth loans for "Ttaenggyeoyo" will be operated under a two-track system: the "Ttaenggyeoyo Business Loan" launched in 2022 and the "Interest Subsidy Loan." The "Ttaenggyeoyo Business Loan," which has not shown significant improvement in performance, is scheduled for restructuring within the year. The bank also plans to expand collaboration with regional credit guarantee foundations to increase the areas where the interest subsidy loan is available. A Shinhan Bank official stated, "We are also working on advancing our strategic credit evaluation model based on data from 'Ttaenggyeoyo' partner stores."

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