KakaoBank Achieves Last Year's Loan Target for Low-to-Mid Credit Borrowers...The Only Internet Bank to Do So

Goal Surpassed 30%, Recording 30.4%

KakaoBank announced on the 23rd that the proportion of credit loans to low- and medium-credit borrowers exceeded 30% last year, recording 30.4%. It was the only internet bank to achieve the goal of expanding loans to low- and medium-credit borrowers.

As of the end of last year, KakaoBank's outstanding credit loans to low- and medium-credit borrowers amounted to approximately 4.3 trillion KRW. This is more than three times the 1.4 trillion KRW recorded at the end of 2020. During the same period, the proportion of credit loans to low- and medium-credit borrowers steadily increased every year from 10.2% to 30.4%.

Despite the expansion of loans to low- and medium-credit borrowers, soundness indicators remain stable. In the fourth quarter of last year, KakaoBank's total loan delinquency rate improved by 0.09 percentage points from 0.58% in the first quarter to 0.49%. The delinquency rate for pure low- and medium-credit loans was in the mid-1% range. Among internet banks, KakaoBank has the largest outstanding balance of loans to low- and medium-credit borrowers, but its delinquency rate for these loans was the lowest.

Having achieved its credit loan target for low- and medium-credit borrowers, KakaoBank plans to continue leading inclusive finance supply this year. Over the next three years, it aims to expand the outstanding balance of credit loans to low- and medium-credit borrowers to over 5 trillion KRW. To this end, it will advance its credit evaluation model using data on low- and medium-credit borrowers. It also plans to maintain a proactive reserve fund accumulation policy.

A KakaoBank official said, "We deeply empathize with the policy intent to expand financial support for low- and medium-credit borrowers and have taken the lead in inclusive finance for financially vulnerable groups such as low- and medium-credit borrowers and those with insufficient financial history despite difficult circumstances." He added, "We will continue to do our best to sustain inclusive finance through our data-driven credit evaluation model development capabilities and risk management expertise."