Woori will offer loans to merchants on the internet

Hwang Weon-cheol, chief digital officer for Woori Bank, far left, poses on Monday with 11st CEO Lee Sang-ho, center, and Park Jin-hyo, head of the Network Technology R&D Center of SK Telecom, far right. [WOORI BANK]

Woori Bank is targeting small merchants to offer loans in a partnership with SK Telecom and 11st, a major e-commerce platform.

The bank announced Monday that it signed an agreement with the telecom giant and e-commerce player to offer specialized loan services to merchants selling products on 11st, saying those merchants are underserved by banks. The loans will be made available in the first half of next year.

“With the agreement, the bank will come up with loans with lower interest rates and other supply chain finance products by deploying non-financial data provided by SK Telecom,” the bank said in a statement.

Supply chain finance refers to businesses offering credit to merchants.

“The sellers often face financial shortfalls due to weak sales and lack of collateral,” it said, “but they will be able to get access to loans with lower interest rates and reduced financial costs thanks to the alternative credit rating model.”

SK Telecom will establish a credit rating system based on a wide range of data, a move approved by the Financial Services Commission through a so-called regulatory sandbox initiative.

A spokesperson for Woori Bank said that the client base could be extended to the users of the online shopping platform.

“We hope to provide more convenient and innovative financial services for customers,” the spokesperson said, “We plan to launch a loan program for the users of the e-commerce platform using the new credit rating system developed by SK Telecom.”

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]