FSC expands small-business credit pilot to 16 banks

The Financial Services Commission (FSC) said on 27 July that it would expand its specialised small-business credit model pilot to 16 banks, covering KRW2.2tn of business loans, with a phased rollout beginning in August 2026.

The FSC, Korea’s market and prudential authority, said the small-business credit assessment system, or SCB, would cover KRW2.2tn, compared with KRW1.8tn across seven banks in the previous pilot.

The seven initial participants — IBK, Shinhan, KB, Woori, NongHyup, Hana and Jeju — are expected to begin sequential operations from the end of August, depending on their preparation.

Nine additional banks — K Bank, KakaoBank, Toss Bank, Suhyup, iM Bank, Busan Bank, Kyongnam Bank, Gwangju Bank and Jeonbuk Bank — are expected to begin during the second half of 2026.

The SCB is designed to assess future growth using non-financial information, including a business’s sector, operating history, sales and local commercial-area data, alongside existing financial and credit information. The measure therefore concerns both credit allocation and supervisory validation.

For participating banks, the immediate task is pilot onboarding rather than full deployment across all small-business lending. The FSC said the revised Credit Information Business Supervision Regulation and the banking sector’s Individual Business Loan Credit Review Guidelines would be completed in August. It also plans to issue an SCB operating guideline covering the use of grades in loan reviews, including preferential rates or limits for higher-rated applicants and employee protection where staff use the model reasonably.

The FSC is preparing a dedicated Saetdol loan for individual business owners, targeting an October 2026 launch. The product is intended to incorporate business characteristics and may use SCB growth grades to support interest-rate benefits for medium-credit business owners. The source does not specify the final eligibility criteria or pricing mechanics.

Regional credit guarantee foundations are scheduled to incorporate the SCB into guarantee screening and assessment from 2027, after system integration through the Korea Federation of Credit Guarantee Foundations. The FSC’s announcement does not establish improved approval rates or borrowing outcomes, so the broader effect on access to credit remains unresolved.

The next steps are completion of the August rule revisions and operating guideline, bank onboarding from the end of August and the targeted October launch of the individual-business Saetdol loan. The 2027 guarantee-foundation implementation will determine whether the pilot extends beyond bank underwriting into guarantee screening.