South Korea to Launch Youth Asset Programs and AI-Based Credit Scoring for Small Businesses

The South Korean government is implementing a series of financial reforms to expand credit access for youth and small business owners, including the creation of a 200 billion won guaranteed loan program for promising young entrepreneurs. According to a joint presidential business report from the Financial Services Commission (FSC), these measures aim to lower barriers for credit card issuance for young adults and integrate AI-based credit scoring for small business owners.

The initiative focuses on asset formation and credit accessibility for demographics that traditionally struggle to meet strict banking requirements. A central component of the plan involves the National Participation Growth Fund, which the government will restructure to increase the proportion of participants from low-income and vulnerable groups to 50 percent, as reported by Newsis on July 15, 2026.

The FSC report outlines a shift in how financial institutions evaluate the creditworthiness of young people and micro-entrepreneurs, moving away from traditional income-based metrics toward more flexible, data-driven assessments.

New Credit Support for Young Entrepreneurs and Consumers

The South Korean government is establishing a 200 billion won fund specifically for guaranteed loans targeting promising young entrepreneurs. This fund is designed to provide liquidity to startups that may lack the collateral typically required by commercial banks but demonstrate high growth potential, according to the FSC report.

Alongside business lending, the government is targeting the consumer credit market. The FSC intends to improve the credit card issuance system to make it easier for the youth population to obtain cards. This move addresses the difficulty young adults face when entering the financial system due to a lack of established credit history.

By easing these requirements, the administration aims to facilitate the transition of young citizens into the formal economy, allowing them to build credit profiles earlier in their professional lives.

AI-Driven Credit Scoring for Small Business Owners

The FSC is introducing AI-based credit evaluation systems to assist small business owners in securing financing. Traditional credit scoring often relies on historical financial statements and tax records, which can disadvantage micro-businesses with irregular cash flows.

The new AI system will analyze alternative data to determine creditworthiness. While the FSC did not specify every data point in the summary, such systems typically evaluate real-time transaction data and business performance metrics to provide a more accurate risk profile than static annual reports.

This transition to AI-driven scoring is intended to reduce the reliance on collateral and high-interest private loans, providing small business owners with more competitive rates from institutional lenders.

Expansion of the National Participation Growth Fund

The government is adjusting the composition of the National Participation Growth Fund to prioritize social equity. According to Newsis, the target for participants from the “common people” or vulnerable sectors will be expanded to 50 percent of the fund’s total composition.

This restructuring is part of a broader youth asset formation program. The goal is to ensure that wealth-building tools are not limited to high-income earners but are accessible to those in lower socioeconomic brackets, allowing them to accumulate capital through structured investment vehicles.

The combined efforts of the 200 billion won loan fund, the revised credit card issuance rules, and the expanded growth fund represent a coordinated attempt by the FSC to lower the entry threshold for financial services in South Korea.