According to the latest reports, Shinhan Bank has entered into a collaboration with SEMAS (Small Business Market Promotion Corporation) for building a blockchain-based platform dedicated to loan management. The platform would streamline the verification process for SMEs that apply for institutional subsidized loans.
As per the reports, though Korea currently has “policy loans” that let small businesses avail lower rates of interest coupled with more manageable plans of repayment, the entire application process is quite long. As a result, SMEs are often discouraged from applying for loans despite such policies being supported by state-owned and government organizations. That is one of the primary reasons why SEMAS and Shinhan Bank have planned to utilize blockchain technology to simplify the whole application process.
With blockchain, the entities will be able to achieve transparent and immutable storage of data. Moreover, there will be more efficient dispute resolution and cross-checking. It will also facilitate digital verification of some documents, says the reports. Both companies hope that the use of blockchain in such a domain will contribute to cutting the number of visits of people to banks and corporations by 50%.
Shin Ok Jin, the President of the Bank, apparently said in a statement that they expect to offer practical services that could offer convenience to all the small businesses.
Acknowledging Shinhan’s supreme blockchain technology, SEMAS’ Chairman, Cho Bong-hwan, shared that through their agreement with the Shinhan Bank, they would be capable of providing more valuable and convenient financial services and policies to small businesses.
As per the reports, this new project hopes to decrease the funding time to just ten days from the 22-day timeline. The firm is planning to launch the project in early 2020.
It is vital to note that Shinhan Bank has already unveiled a blockchain credentialing system for loan documents verification six months ago. Apart from that, the bank also has other blockchain-based projects. It has previously announced its usage of blockchain for derivatives. The bank is also looking to begin using blockchain technology for credit card payments, as disclosed last month.