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Naver ratings and reservation records lower financial barriers for small business owners.
South Korea’s financial regulators are pushing to offer lower interest rates and higher credit limits to restaurants with strong Naver ratings and merchants on Naver’s SmartStore platform. The initiative aims to expand funding access for self-employed business owners by incorporating non-financial data into credit assessments.
According to financial industry sources on the 9th, the Financial Services Commission, Naver, and credit rating agencies have reached consensus on developing a Small Business Credit (SCB) evaluation model.
A task force led by the FSC is currently validating the effectiveness of using Naver Place and SmartStore data—including customer ratings and booking records—in credit assessments. “The Korea Credit Information Services and NICE Information Service are developing the model,” an FSC official said. “We aim to complete it in the first half of this year.”
The new credit evaluation model will be applied to loan screening for small business owners and self-employed individuals. Current models rely primarily on financial information such as repayment history, credit extensions, and real estate collateral tied to business owners personally. Industry observers expect that utilizing Naver’s non-financial data will enable growth potential assessments, leading to more favorable loan terms.
“Until now, self-employed loans have mainly looked at the owner’s personal credit or collateral,” a financial industry official said. “We expect significant changes in the lending market going forward.”
📷 Naver ratings and reservation records lower financial barriers for small business owners. Credit: sedaily.com.
Growth Potential Takes Center Stage
The most distinctive feature of the new SCB model is its focus on growth potential assessment. Current individual business owner credit models are designed primarily to predict default risk based on past financial transaction history and collateral.
According to Korea Credit Bureau, personal credit items such as repayment history and loan and card information account for 75% of current individual business owner credit assessments. Young entrepreneurs and early-stage business owners with limited financial histories have frequently received low credit ratings. This credit evaluation system, which fails to adequately reflect business information, has been a factor limiting small business owners’ access to financing.
Financial authorities believe incorporating non-financial information from Naver SmartStore and Place into the SCB model could mark a turning point for more comprehensive assessment of self-employed individuals’ potential.
Naver has accumulated diverse data that can gauge business stability and growth potential—not only sales capacity metrics such as payment amounts and transaction volumes, but also customer ratings, booking performance, refund rates, repeat customer counts, and visitor trends. Customer rating levels indicate product and service satisfaction, while changes in booking numbers or order volumes can serve as timely indicators of business momentum.
Platform Data Shows Promise
Financial industry experts view these indicators as having significant discriminatory power. The FSC has maintained behind-the-scenes communication with major platform companies to address limitations in traditional credit evaluation systems.
“There have been challenges in information sharing as big tech companies planned their own data businesses,” a financial industry official said. “If platform company data is used in credit evaluation, it will greatly help expand financial access for mid- to low-credit borrowers.”
The FSC plans to actively apply the SCB model in loan screening to expand funding for small business owners with growth potential. Commercial banks currently provide funding to technology companies lacking collateral through Technology Credit Bureau evaluations, and similar support mechanisms are expected.
Early-stage entrepreneurs and business owners seeking fresh starts are expected to benefit directly. As unstructured information such as business reputation and track record becomes reflected in assessments, many borrowers are expected to see improved credit limits and interest rates, with some transitioning to prime borrower status.
Proven Results
Kakao Bank has confirmed cases of approving loans to previously rejected customers—including a shopping mall owner in their 30s and a restaurant owner with a credit score in the 700s—after introducing an alternative credit evaluation model combining financial and non-financial information. Through this approach, Kakao Bank’s unsecured loan volume reached 50.7 billion won from 2023 through June of last year. Despite maintaining mid- to low-credit loans at over 30% of its portfolio using non-financial information, the bank’s delinquency rate stood at a stable 0.51% as of year-end.
Financial authorities are also accelerating development of alternative credit evaluation models for all “thin filers”—individuals with insufficient financial transaction histories—not just small business owners. The FSC has reportedly requested cooperation from department stores and convenience store chains to utilize customer consumption data held by large retailers for credit assessment.
“Borrowers who maintain consistent spending patterns generally have no major issues with loan repayment,” a financial industry official said.
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Source: sedaily.com
