KakaoBank Reaches 4 Trillion Won in Cumulative Individual Business Loan Support

Outstanding Loan Balance Exceeds 2.5 Trillion Won in the First Half of the Year

KakaoBank has reached a cumulative supply of 4 trillion won in loans for individual business owners, approximately three years after launching its business loan service. Six out of ten customers who took out individual business loans were found to have mid- to low-credit ratings.

Since launching its individual business banking service in 2022, KakaoBank has introduced products such as the "Individual Business Owner Credit Loan" and the "Individual Business Owner Guaranteed Loan." As of the end of July, the cumulative supply to small business owners through these products reached 1.85 trillion won and 1.92 trillion won, respectively, totaling approximately 4 trillion won.

The outstanding loan balance has also continued to rise. As of the end of June, the outstanding balance for "Individual Business Owner Credit Loans" stood at 1 trillion won, while "Individual Business Owner Guaranteed Loans" accounted for 1.5 trillion won. The combined outstanding balance of loans to small business owners exceeded 2.5 trillion won. Notably, this represents an increase of more than 80% in the outstanding balance of individual business loans compared to the same period last year. KakaoBank plans to further expand its lineup of financial products for small business owners by introducing "Individual Business Owner Secured Loans" by the end of the year.

Small business owners with lower credit scores are increasingly turning to KakaoBank's individual business loans. As of the end of July, 64% of all individual business loan customers were mid- to low-credit borrowers. The proportion of mid- to low-credit customers was even higher for the "Individual Business Owner Guaranteed Loan." Customers who used the "Interest Support Guaranteed Loan" through KakaoBank benefited from interest subsidy support, reducing their interest rates by approximately 2.25 percentage points as of the end of July, resulting in an average annual interest rate of 2.26%. The total amount of interest saved through these benefits has accumulated to 22.3 billion won.

KakaoBank is also continuously expanding its convenience services for small business owners. The "VAT Box," launched in January, is a business owner-exclusive product that helps individual business owners save in advance for value-added tax incurred during business operations. It offers "Automatic Savings" and "VAT Report" features to help users prepare funds in line with the biannual VAT payment schedule.

In addition, KakaoBank has made business operations more convenient for individual business owners by introducing a variety of innovative services, many of which are industry firsts. In April last year, KakaoBank became the first in the financial sector to launch the "Integrated Inquiry Service for Customer-Tailored Policy Fund Loan Products." With a single inquiry, customers can check all guaranteed loans available for their application, and badges indicating eligibility for each condition make it easy for anyone to find the right product.

KakaoBank has also enhanced the discrimination power of business owner credit assessments through its "Small Business Industry-Specialized Credit Evaluation Model." In fact, after applying the alternative credit evaluation model developed by KakaoBank to the screening of individual business owner credit loans, it was found that one out of every seven loan applications?including those from individual business owners who were previously rejected due to insufficient financial data?received additional approval.

KakaoBank stated, "As a 'financial partner' to 1.2 million individual business owners, we are actively participating in providing financial support to small business owners facing difficulties," and added, "We will continue to practice inclusive finance by offering practical support and convenience services that help reduce the financial burden on small business owners."