K Bank's Mid-to-Low Credit Loans Reach 1.6 Trillion KRW by 3Q... More Than Double Compared to Last Year

The Proportion of Loans to Low and Medium Credit Borrowers at 24.7%... Up 8.1%P from the Previous Year

[Asia Economy Reporter Minwoo Lee] K-Bank's loan supply to low- to medium-credit borrowers (KCB credit score 850 or below) has approached 1.6 trillion KRW through the third quarter of this year.

On the 25th, K-Bank announced that the cumulative loan amount to low- to medium-credit borrowers for the first three quarters of this year reached 1.5992 trillion KRW. This exceeds twice the total low- to medium-credit loan volume of 751 billion KRW for all of last year.

In the third quarter, the average interest rate for loans executed to low- to medium-credit customers at K-Bank was 7.36% per annum. The lowest interest rate among executed loans was 3.80% per annum, and even customers with a low credit score of 381 received loans.

This interest rate level was found to be lower compared to competing internet-only banks. According to the Bankers Association's loan interest rate comparison disclosure, based on transactions from July to September, K-Bank's low- to medium-credit loans were the lowest among internet banks across most credit score ranges. The 651?850 credit score range was the lowest for three consecutive months.

This is explained as a result of applying a specialized credit scoring model (CSS) in February that reflects the characteristics of low- to medium-credit and thin-file (customers with insufficient financial transaction history) customer groups. Since the introduction of the specialized CSS, the loan approval rate for low- to medium-credit customers has increased.

As a result, K-Bank's loan proportion to low- to medium-credit borrowers rose to 24.7%, up 8.1 percentage points compared to the end of last year.

A K-Bank official stated, "The introduction of the specialized CSS for low- to medium-credit customers has expanded loan supply and provided benefits through lower interest rates. We will continue to expand loan supply to low- to medium-credit borrowers in line with the internet bank's founding purpose of financial inclusion for vulnerable groups."