Internet-only banks are focusing on expanding loans to sole proprietors. The goal is to reduce reliance on household loans and diversify their loan portfolios.
According to the financial authorities on the 3rd, KakaoBank's loans to sole proprietors in the first half of this year totaled 2.539 trillion won, up about 81% from a year earlier. During the same period, Kbank rose 52% from 1.04 trillion won to 1.58 trillion won. Toss Bank, which was the first among internet-only banks to start lending to sole proprietors, is not yet offering collateral loans, so it is maintaining a similar level to last year. The three internet-only banks' loans to sole proprietors increased from 4.0815 trillion won in the first half of 2024 to 5.5251 trillion won in the first half of this year.
The financial authorities have recently emphasized a shift to productive finance and are calling for strengthening corporate lending functions that can support the real economy rather than mortgage loan products. However, because internet-only banks are, by design, prohibited from face-to-face sales and from extending credit to large corporations, it is not easy for them to increase corporate loans.
For this reason, the direction in which internet-only banks continue to expand is loans to sole proprietors and small business owners. However, the blind spot in small business lending is managing the delinquency rate. As internet-only banks expand small business lending, delinquency rates inevitably rise, so they are increasing sole proprietor collateral loans and focusing on advancing their credit scoring models.
KakaoBank will launch a new loan product for sole proprietors, "sole proprietor collateral loan," within the year. Kbank recently agreed with the Korea SMEs and Startups Agency (KOSME) to supply non-face-to-face policy finance products to support the growth of small and medium-sized enterprises. Toss Bank will expand to sole proprietor collateral loans along with the start of mortgage loan products in the first half of next year.
Meanwhile, the share of household loans in the total credit of internet-only banks exceeded 90%. KakaoBank reached 94.33%, Kbank 90.89%, and Toss Bank 90.70%, maintaining similar levels. In contrast, the share of household loans at commercial banks did not exceed 50%. KB Kookmin Bank was 48%, Shinhan Bank 44%, and Woori Bank 49%.