Interview with Choi Jeonghwan, CEO of Niceabc on the 29th
"Resolving Corporate Loan Cliff through Tech Finance"
Aiming to Introduce Mid- to Long-Term BNPL Payment Method
On the 29th, Choi Jeong-hwan, CEO of Niceabc, is conducting an interview with Asia Economy at the headquarters in Yeongdeungpo-gu, Seoul. Photo by Niceabc
[Asia Economy Reporter Song Seung-seop]"In the consumer finance market, there is a lot of talk about supporting thin filers (those with insufficient financial history). On the other hand, the corporate finance market shows no such movement. We aim to become a supply chain finance platform for small and medium-sized business operators."
On the 29th, Choi Jeong-hwan, CEO of NICEabc, stated this in an interview with Asia Economy at the headquarters in Yeongdeungpo-gu, Seoul, adding, "Financial support is also needed for thin filer companies and sole proprietors who find it difficult to borrow money from commercial banks." He expressed his intention to offer reasonable mid-interest loan products to medium- and low-credit companies, similar to consumer mid-interest loans. During the conversation, CEO Choi repeatedly emphasized the need to resolve the 'corporate loan cliff.'
NICEabc is an online investment-linked finance company (OnTu company) affiliated with the NICE Group, launched in August 2019. Last year, it made headlines by receiving a Series A investment of 10 billion KRW, the largest in the OnTu industry at the time, from IBK Industrial Bank of Korea and Stonebridge Ventures.
CEO Choi cited conservative lending practices and lack of capability as reasons for the shortage of mid-interest loan products for corporate consumers. He said, "Primary financial institutions have conducted collateral-based lending in the corporate finance market and are now diversifying products but remain conservative," adding, "Accurate evaluation of thin filer companies has not been achieved, so mid-interest loan products are scarce."
As a solution, he proposed technology finance utilizing artificial intelligence (AI). CEO Choi explained, "NICEabc can be seen as having transferred from NICE Credit Information, with secured evaluation tasks, risk management, staff, and data for companies," and added, "We have also internally developed advanced models." He continued, "NICEabc uses statistical and AI models and reviews unstructured data," noting, "Verification shows that the AI model's capability improved by an average of 26%."
Building a "Corporate Supply Chain Finance" through Technology Finance
Internally, the company’s composition is similar to other OnTu companies, with more technical personnel than financial experts. NICEabc currently has 21 employees, with over 50% of recruitment targets being developers.
Most loans are made in the form of accounts receivable securitization and electronic bill discounting. CEO Choi explained, "When SMEs transact with prime contractors, accounts receivable (bills) are issued, which we acquire and provide advance payment for," adding, "Even if the borrowing company's credit is low, if the prime contractor who must pay according to the accounts receivable has good credit, there is no problem in collecting the payment." He described this as a "kind of credit enhancement."
Based on this, they have set the accounts receivable distribution hub as a mid- to long-term strategy. Their goal is to introduce the payment method called BNPL (Buy Now, Pay Later) to Korea. CEO Choi said, "It is a globally popular payment method where the purchasing company can buy necessary goods without money first, and the platform pays the seller," explaining, "The revenue is recovered later from the purchasing company." Currently, BNPL exists only in B2C (business-to-consumer), but they intend to apply it to B2B (business-to-business) transactions in Korea.
He advised, "Globally, corporate demand for finance is increasing, but supply cannot keep up," adding, "Bottlenecks are appearing even between companies, and to break through them, a financial supply chain is necessary."
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