According to a report from the Korea Federation of Banks on May 7, the three internet banks—K-Bank, Kakao Bank, and Toss Bank—had a combined 33.1% of their credit loan balances allocated to borrowers in the bottom 50% of credit scores as of the end of last year, down from 33.8% the previous year.
Individually, K-Bank and Kakao Bank saw declines of 2.8 and 0.1 percentage points, respectively, with figures of 32.5% and 32.1%. Toss Bank, however, increased its share to 34.9%, a rise of 0.9 percentage points. Overall, the proportion of loans to low- and mid-credit borrowers remains just above the government guideline of 30%, showing little sign of significant growth.
The share of new loans to low- and mid-credit borrowers reflects a similar trend, with K-Bank and Kakao Bank barely exceeding the 32% threshold at 34.5% and 35.7%, respectively. This raises concerns that the banks are prioritizing target fulfillment over genuine expansion of inclusive finance.
While internet banks cite soundness management as a reason for their cautious approach to expanding loans to low-credit borrowers, critics argue that this stance undermines their intended role in promoting inclusive finance. They warn that limiting supply under the guise of risk management blurs the distinction between internet banks and traditional banks.
Kim Yong-beom, head of the Presidential Policy Office, recently criticized this trend on social media, stating, "Household loans should not be confined to high-credit borrowers in a safe bubble. Cherry-picking is not the mission of internet banks." He condemned the practice of selectively serving only financially stable customers.
Kim also challenged financial authorities, questioning whether they have inadvertently strengthened existing power structures under the pretext of maintaining soundness. This has led to speculation that authorities may intensify their oversight of internet banks' lending to low-credit borrowers and consider adjustments to related policies.
Seo Ji-yong, a professor at Sangmyung University, noted that internet banks have focused on higher-credit borrowers to avoid deteriorating financial soundness. He acknowledged that even with demands to expand loans to low-credit borrowers, the inherent selection process raises barriers. He added that authorities should consider providing incentives and policy adjustments to support internet banks in this area.
* This article has been translated by AI.
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