Household Loans Decrease for the First Time Since May Last Year... Corporate Loans on the Rise
Targeting Small Business Owners and Individual Entrepreneurs
Competition Intensifies Between Commercial Banks and Internet Banks
[Asia Economy Reporter Minwoo Lee] As the government continues to manage the scale of household loans, banks are strengthening corporate lending. Fierce competition is expected in loans for small business owners and individual entrepreneurs.
According to the financial industry on the 23rd, the four major commercial banks?KB Kookmin Bank, Shinhan Bank, Hana Bank, and Woori Bank?announced in their earnings conference calls that they plan to increase corporate loans by about 4-8% compared to the previous year. This appears to be an effort to increase corporate lending in consideration of the government's management stance.
In January as well, household loans decreased while corporate loans increased. The outstanding balance of household loans at the five major domestic commercial banks, including NH Nonghyup, decreased by about 1.3634 trillion KRW compared to the previous month. This was the first decrease since May of last year. On the other hand, during the same period, the outstanding balance of corporate loans increased by 8.1749 trillion KRW from the previous month, reaching 644.0618 trillion KRW.
As financial authorities manage the total growth rate of household loans at 4-5%, attention is turning to corporate loans. KB Kookmin Bank is reported to have emphasized strengthening corporate sales since the second half of last year. Shinhan Bank is also known to be focusing on corporate lending starting this year. Woori Bank plans to fully support corporate sales in the first quarter of this year. They also intend to implement rewards weighted by new loan performance for large and small-to-medium enterprises.
In particular, they are focusing on customers such as small business owners and self-employed individuals. To this end, commercial banks have even prepared new credit evaluation models. KB Kookmin Bank is developing a 'small business owner specialized model' using internal data such as group affiliate information and commercial district information, as well as customer responses. They also plan to develop a credit evaluation model dedicated to larger corporate customers such as small and medium-sized enterprises in the future. Shinhan Bank is collaborating with KT to develop a credit evaluation model exclusively for small business owners. They plan to utilize information from KT’s commercial district big data platform 'Jalnagage' with a 'restaurant specialized model.' Data such as the number of repeat visits through franchise payment data will also be reflected.
Internet-only banks will also enter full competition starting this year. Toss Bank launched a loan targeting individual entrepreneurs such as self-employed and small business owners on the 14th, the first among internet banks. K Bank plans to start 'working capital loans for individual entrepreneurs' in the first quarter. Kakao Bank also plans to launch SOHO loans for individual entrepreneurs in the second half of this year.
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