[Edaily Reporter Kim Se-yeon ] The trend of three internet-only banks (KakaoBank Corp.(323410), Kbank, and Toss Bank) expanding credit loans to borrowers with medium-to-low credit scores has stalled. In the second quarter of this year, the proportion of new credit loans extended to medium-to-low credit borrowers decreased for all three banks compared to the previous quarter. The proportion based on outstanding balances, including existing loans, also fell across the board.

According to the Korea Federation of Banks’ disclosure on “Proportion of Consumer Loans to Middle- and Low-Credit Borrowers” on the 28th, Kbank’s proportion of consumer loans to middle- and low-credit borrowers in the second quarter of this year stood at 32.4% based on new loan volume. This is 1.2 percentage points lower than the 33.6% recorded in the first quarter.
KakaoBank Corp. saw an even sharper decline. The proportion of new unsecured loans to medium- and low-credit borrowers, which stood at 45.6% in the first quarter, fell to 38.4% in the second quarter—a drop of 7.2 percentage points in just three months. Toss Bank also saw a 2.4 percentage point decline during the same period, from 34.5% to 32.1%.
The share of new loans to borrowers with medium-to-low credit scores is calculated by dividing the total amount of new personal and self-employed credit loans extended to borrowers in the bottom 50% of the credit score distribution by the total amount of new credit loans. A decline in this share means that the proportion of loans extended to medium-to-low credit borrowers out of total credit loans has decreased compared to the previous quarter.
Not only in new loans but also in total loan balances, the share accounted for by borrowers with medium-to-low credit scores declined at all three banks. As of the end of June, Kbank’s share of credit loan balances held by borrowers with medium-to-low credit scores stood at 31.3%, down 0.6 percentage points from 31.9% at the end of March. KakaoBank Corp.’s share fell by 0.4 percentage points from 32.3% to 31.9%, while Toss Bank’s share decreased by 0.5 percentage points from 34.7% to 34.2%.
However, it is difficult to conclude that online banks have reduced the actual volume of loans provided to borrowers with medium-to-low credit scores based solely on this decline in the proportion. Since the proportion of loans to medium-to-low credit borrowers is calculated using total consumer loans as the denominator, the proportion can decrease even if loans to these borrowers increase—provided that loans to high-credit borrowers grow at a faster rate.
Financial regulators have set the following targets for internet banks’ proportion of credit loans to medium- and low-credit borrowers: △ at least 30% based on outstanding balances and △ at least 32% based on new loan volume. The latest figures for all internet banks exceed these targets. Internet banks maintain that, since they must manage both the supply of loans to medium- and low-credit borrowers and the overall volume and soundness of household loans simultaneously, it is difficult to simply expand this proportion indiscriminately.
An official from an internet bank explained, “In the second quarter, increased volatility in the credit loan market made it difficult to manage the proportion of loans to borrowers with medium-to-low credit scores. Despite these circumstances, we continued to provide loans to these borrowers and maintained the target levels.”