KakaoBank has partnered with Naver Pay to expand its supply of property-backed loans for sole proprietors with interest rates starting in the 2 percent range. The move aims to improve financial access for small business owners and accelerate the bank's inclusive finance push through Naver Pay's loan comparison service.
KakaoBank said Wednesday that its "Sole Proprietor Property-Backed Loan" product can now be reviewed and applied for through Naver Pay's loan comparison service. The product was first introduced by KakaoBank last October. It offers fully non-face-to-face loans of up to 1 billion won for purposes such as business operating capital and business premises acquisition.
Interest rates start in the 2 percent range, maintaining the lowest level in the industry. As of Wednesday, rates on the Sole Proprietor Property-Backed Loan ranged from 2.85 to 8.23 percent annually. In the first quarter of this year, KakaoBank lowered loan rates by up to 0.60 percentage point and expanded preferential rate benefits from 0.15 percentage point to 0.30 percentage point annually, easing financial burdens on small business owners.
The product accepts apartments, officetels, and commercial complex units as collateral. However, the Naver Pay loan comparison service will initially handle only loans against apartments and officetels, with plans to expand to commercial complex units later.
Borrowing funds for the purpose of purchasing apartments, villas, or other multi-unit residential housing is restricted. KakaoBank operates a post-loan monitoring process to check whether the funds are used outside their intended purpose even after disbursement. Loans are also unavailable for certain business categories, including residential building development and supply, as well as residential building leasing.
After comparing products on the Naver Pay app or website, customers can connect to the KakaoBank app to apply for the loan. Sole proprietors without a KakaoBank account can also apply after signing up as a member.
KakaoBank has been focusing on expanding inclusive finance for sole proprietors. The bank's outstanding loans to sole proprietors stood at 3.403 trillion won at the end of the first quarter, up 348 billion won from the end of last year. Loan disbursements over the past year alone reached 2.1 trillion won.
"More than half of our sole proprietor loan customers are classified as mid- to low-credit borrowers," a KakaoBank official said. "We will continue to provide a variety of innovative financial services to reduce customers' financial burdens and help them secure funding."
