[1mm Financial Talk] Increase Loans for Ordinary People... Impatient Internet Banks

As the year-end approaches, internet banks are busy trying to achieve their target loan ratios for medium- and low-credit borrowers. In some banks, an inversion phenomenon has even occurred where interest rates for medium- and low-credit borrowers are lower than those for high-credit borrowers.

According to the Bankers Association disclosure on the 23rd, K-Bank's general credit loan interest rate (disclosed in October, based on September transactions) was recorded at 7.51% for the credit score range of 1000?951. This is 1.89 percentage points higher than the 5.62% rate for the 850?801 range. It is also more than 1.3 percentage points higher compared to 5.74% for 800?751, 6.09% for 750?701, and 6.16% for 700?651. The high-credit category of 950?901 also recorded an interest rate in the 7% range at 7.33%. Typically, high-credit borrowers have lower interest rates than medium- and low-credit borrowers, but at K-Bank, this 'anomalous phenomenon' of inversion has occurred.

Considering that K-Bank has been continuously lowering interest rates for medium- and low-credit borrowers, this trend is expected to continue in this month's disclosure as well. Last week, K-Bank reduced loan interest rates for medium- and low-credit borrowers by up to 3.3 percentage points.

KakaoBank has also been steadily lowering interest rates. At the end of last month, KakaoBank reduced the interest rate on its 'Medium Credit Loan' product for medium- and low-credit borrowers by up to 0.75 percentage points. KakaoBank also lowered the interest rate on the Medium Credit Loan by up to 0.5 percentage points on the 5th of last month. As of the previous day, KakaoBank's lowest interest rate for the Medium Credit Loan stood at 4.06% per annum.

Internet banks are lowering interest rates like this to accelerate achieving the loan ratio targets for medium- and low-credit borrowers set by financial authorities. As of the end of October, K-Bank's loan ratio for medium- and low-credit borrowers was 27.4%, falling short by 4.6 percentage points from the year-end target of 32%. KakaoBank's ratio was 28.7% as of the third quarter, leaving 1.3 percentage points to reach its 30% target. Although Toss Bank has not disclosed its third-quarter figures, considering its 35.6% ratio as of August, it is expected to be at a similar level. Toss Bank emphasizes that among the three internet banks, it has the highest proportion of medium- and low-credit borrowers, despite the gap from its target of 44%. An official from an internet bank commented, "Given the timing, no one wants to be unfairly criticized, so we can't help but be cautious."

Internet banks are also actively participating in the financial authorities' 'win-win' policy. They are especially proactive in lowering loan interest rates for small business owners. K-Bank lowered the interest rate on its 'Boss Credit Loan' by up to 1.92 percentage points annually depending on the customer's credit rating, bringing the lowest interest rate down to 4.69%. KakaoBank also significantly reduced interest rates on personal business owner credit loans to the lowest levels in the banking sector this year, greatly easing the interest burden on small business owners during high-interest periods. As of the previous day, KakaoBank's lowest interest rate for personal business owner credit loans was around 4.55% per annum.