K Bank Partners with Kakao Pay... Focus on Boosting Loans for Low to Medium Credit Borrowers

[Asia Economy Reporter Kiho Sung] Internet-only bank K-Bank is joining hands with KakaoPay to expand loans for low- to mid-credit borrowers. Through this collaboration, K-Bank is expected to leverage KakaoPay's large user base, while KakaoPay will benefit by adding K-Bank's loan products for low- to mid-credit borrowers, creating a win-win effect.

According to the financial sector on the 5th, K-Bank and KakaoPay recently signed a new contract related to loan solicitation outsourcing. Through this agreement, K-Bank plans to offer three products?credit loans, credit loan plus, and overdraft accounts?targeted at low- to mid-credit borrowers via the KakaoPay platform.

For KakaoPay, this is the first time mediating loans from an internet bank. Until now, KakaoPay has mainly mediated products from secondary financial institutions such as savings banks, regional banks, insurance companies, and capital companies, and among primary financial institutions, it mediates Shinhan Bank, Woori Bank, SC First Bank, and Hana Bank.

This collaboration is part of K-Bank's ongoing efforts to expand loans for low- to mid-credit borrowers. According to the Korea Federation of Banks, as of the end of the third quarter this year, the proportion of loans issued to borrowers with a credit evaluation score (CB) of 820 or below among the total credit loan balance was 13.7% for K-Bank. K-Bank's target is 21.5% by the end of the year. Industry experts expect it will be difficult to achieve this target by year-end given the current trends in internet banks this year.

KakaoPay's monthly active users (MAU) reach 20.44 million. K-Bank expects to further activate low- to mid-credit loans through the large user base KakaoPay holds.

A K-Bank official stated, "We proceeded with this partnership to increase customer touchpoints," adding, "We will continue to do our best for loans to low- to mid-credit borrowers."