KakaoBank Reaches 15 Trillion Won in Cumulative Loans to Mid- and Low-Credit Borrowers

KakaoBank announced on October 14 that it has supplied a cumulative total of 15 trillion won in credit loans to mid- and low-credit borrowers.

Since its launch in July 2017, KakaoBank has provided credit-based loans for approximately eight years, up to September this year. In the first half of this year alone, it supplied 1.2 trillion won in loans to mid- and low-credit borrowers.

As of the second quarter, the proportion of mid- and low-credit loans in KakaoBank’s total loan balance stood at 33.1%. Based on new loans issued, the proportion was 49.4%, surpassing the target of 30%. KakaoBank’s overall delinquency rate for total loans in the second quarter was 0.52%.

According to KakaoBank, 56% of customers who received mid-credit loans in the first half of this year experienced an increase in their credit scores within one month after taking out the loan. The average increase was 46 points, with the largest individual increase being 300 points, from 682 to 982.

Among customers who held loans from non-bank financial institutions such as savings banks, capital companies, or credit card companies at the time they received their mid-credit loan, one in three (34%) saw their outstanding non-bank loan balance decrease after one month. The average outstanding balance from non-bank financial institutions decreased by 4.4 million won, and the average credit score increased by 35 points, indicating an improvement in creditworthiness.

A KakaoBank representative stated, "We will continue to take the lead in promoting inclusive finance, leveraging our competitive interest rates and risk management capabilities."