Shinhan Bank Partners with Douzone Bizon to Establish 'SME Specialized Financial Platform Operator'

Presenting a New Financial Paradigm for SMEs in Partnership with Leading Domestic ICT Companies
Creating a New Supply Chain Finance Market through SME-Focused Financial Platforms Including Accounts Receivable Factoring
Expecting Smooth Capital Supply to SMEs Facing Funding Challenges Compared to Large Corporations

[Asia Economy Reporter Sim Nayoung] Shinhan Bank announced on the 22nd that it has signed a joint venture (hereinafter ‘JV’) establishment agreement with Douzone Bizon to lead the small and medium-sized enterprise (SME) market by connecting financial ICT and technological competitiveness. After signing the JV establishment agreement, the two companies will first establish a preparatory corporation and, through the financial authorities’ approval process, jointly own shares to jointly invest in and operate supplier finance intermediation and corporate data businesses.

The JV will conduct financial intermediation businesses such as accounts receivable factoring, which enables rapid monetization of accounts receivable based on real-time accounting and ERP data of SMEs, as well as various data businesses.

Compared to large corporations, SMEs have limitations in receiving financial support from general commercial banks due to lack of disclosed information and reliability. To address this, the two companies plan to resolve SMEs’ funding difficulties through the JV, firmly secure a leading position in the SME financial market, and present a new paradigm.

First, the JV will prioritize the accounts receivable monetization intermediation business. Accounts receivable factoring is a financial service that quickly converts a company’s accounts receivable into cash, facilitating smooth fund management for SMEs. The JV plans to build a digital platform that digitizes all processes of factoring application, evaluation, and execution by analyzing real-time accounting and ERP data generated at each stage of SMEs’ business activities such as production processes and sales flow.

Ultimately, through this, the JV aims to complete SME-specialized supply chain finance that can predict funding needs in advance at each stage of business activities and proactively provide financial needs. Once supply chain finance is activated, SMEs will be able to use various financial products with different maturities according to business activity stages, enabling timely diverse financing and reducing financial costs.

Overseas, various supply chain finance business models have already developed, with leading companies such as C2FO, Taulia, and Fundbox receiving significant recognition in the market.

Additionally, the JV plans to conduct data business by combining corporate information inquiry services acquired by Douzone Bizon and data analysis of SME management program users to supply high value-added business information, including credit information, to financial institutions and related businesses.