Eight Percent pushes mutual finance linked investment to expand mid-rate loans

Eight Percent is pursuing linked investment with the mutual finance sector and moving to expand the supply of mid-rate loans for borrowers with mid to low credit scores. It plans to broaden a cooperation model between traditional finance and fintech by combining mutual finance’s region-based funds with online investment-linked finance firms’ credit assessment capabilities.

Eight Percent said on Sunday it will expand cooperation with the mutual finance sector, starting with local agricultural cooperatives. Its first linked investment product with mutual finance is scheduled to be launched in the second half of this year.

Mutual finance’s linked investment with online investment-linked finance firms is being pursued through the Financial Services Commission’s innovative financial service programme. Under the scheme, funds from the mutual finance sector can pass through online investment-linked finance platforms and be supplied as mid-rate loans for borrowers with mid to low credit scores and small business owners.

Mutual finance is a retail finance institution based on cooperatives such as agricultural and livestock cooperatives and fisheries cooperatives. It is expected to be able to diversify where it manages funds through linked investment with online investment-linked finance firms.

Since its establishment in 2014, Eight Percent has operated personal credit loans and has upgraded its proprietary credit rating model, E-index. More recently, it has incorporated artificial intelligence-based analysis technology to strengthen its ability to forecast borrowers’ repayment capacity and manage risk.

The company said borrowers with mid to low credit scores account for 76 percent of Eight Percent’s personal credit loans. Delinquency rates for online investment-linked finance loans are being managed at around 1.3 percent. It said it is based on this that it is pursuing both lending supply for borrowers with mid to low credit scores and soundness management. Eight Percent currently operates linked investment products with more than 10 savings banks.

Eight Percent CEO Hyo-jin Lee (이효진) said, “Mutual finance and online investment-linked finance firms each have strengths in locally rooted finance and digital credit assessment capabilities.” She added, “Through cooperation between the two sides, we will be able to provide financial opportunities to more borrowers with mid to low credit scores and small business owners, and contribute to expanding inclusive finance.”