KDB extends first loan based on data collateral

South Korea’s state-run Korea Development Bank (KDB) said Thursday it has lent 5 billion won ($4.56 million) to Korea Credit Data (KCD) with its data and app as collateral, making it Korea’s first loan case backed by intangible data asset.

This is likely to open up new ground for startups that have no tangible assets like buildings or property.

The collateral is sale and purchase data managed via KCD’s Cash Note app, including its program and source code. Cash Note was launched in 2016 on Korea’s biggest mobile messenger KakaoTalk as a provider of business management services, helping proprietors oversee sales performances, analyze customers and manage taxes. The app is now used by 65 businesses across the country.

KDB would hold the rights to KCD’s data even if it is acquired by another company.

This is part of KDB’s efforts to introduce new lending programs for small startups.

It installed a similar loan instrument for innovative companies late last year, allowing them to take out loans with their data and apps as collateral.

KDB plans to provide 500 billion won in loans under the scheme.

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