Shinhan provides microcredit service for street vendors

By Kim Jae-won

Shinhan Bank is well-known for its active engagement in social corporate responsibility (CSR), from supporting child cancer patients to creating jobs for young job seekers.

The third-largest lender says that it also provides microcredit services for low-income families with poor credit ratings through its subsidiary Shinhan Smile Microcredit Bank (SSMB).

Shinhan has provided a total of 3.7 billion won in loans for 360 low-income street vendors since it launched its first branch in December 2009. SSMB has opened branches near traditional markets to support street vendors and small business owners, who need a small amount of seed money.

First, it opened branches in the metro-Seoul area, such as Bupyeong Complex Market in Incheon and Anyang Central Market in the Gyeonggi Province city. Now Shinhan’s microcredit lender aims to expand its presence to the non-metro Seoul area.

It opened microcredit bank branches in Changwon and Cheongju in September. SSMB launched its seventh branch in Youngcheon Public Market in North Gyeonsang Province last month. SSMB plans to add one more branch in Gwangju this year.

The loan conditions are same as with other Smile microcredit banks. Street vendors and small business owners can borrow up to 10 million won at an annual interest of 4.5 percent regardless of their credit grades. They can pay back the money in five years.

Shinhan said it wants to boost the local economy through the program.

“Shinhan hopes that the Youngcheon branch can contribute to the local economy. To achieve this goal, we will provide various services, including consulting, for the street vendors and local shop owners,” Shinhan Bank executive Oh Se-il said at the launching event of Youngcheon branch in Oct. 20.

“We will continue to expand our business here for the local traditional markets and small business owners.”

There are about 230 shops and 70 street vendors at the Youngcheon Public Market, which opens every five days.

Shinhan Financial Group, the parent company of Shinhan Bank and SSMB, announced a “co-existence” management in August to cooperate with small enterprises and the underprivileged. The group plans to expand SSMB’s asset size from 50 billion won to 70

billion won by next year.