'Thin-file customers' discovered by the three internet-only banks... all meet their mid- to low-credit loan targets

[Financial News] KakaoBank Corp, K Bank and Toss Bank, the three internet-only banks, continued their inclusive finance efforts in the second quarter of this year by extending more than 30% of their loans to mid- to low-credit borrowers.
According to the financial sector on the 28th, KakaoBank Corp's mid- to low-credit loan balance ratio and new loan ratio in the second quarter of this year came in at 31.9% and 38.4%, respectively, exceeding its targets of 30% and 32%.
KakaoBank Corp supplied 520 billion won in credit loans to mid- to low-credit customers, including individuals and sole proprietors, in the second quarter. It newly extended 1 trillion won worth of such loans in the first half alone, bringing cumulative lending since its launch in 2017 to more than 16 trillion won.
It also maintained soundness alongside inclusive finance. Even while keeping the share of mid- to low-credit loans above 30%, its delinquency rate in the first quarter was stably managed at 0.51%.
K Bank also beat its targets, posting a 31.3% average balance ratio and a 32.4% new loan ratio for mid- to low-credit borrowers in the second quarter. The bank extended 366.3 billion won in new mid- to low-credit credit loans in the second quarter, up about 31% from 278.9 billion won a year earlier.
Since its launch in 2017, K Bank's cumulative mid- to low-credit credit loans reached 9.0268 trillion won as of the first half.
K Bank has also steadily supplied private mid-rate loans. Its private mid-rate loan supply in the second quarter of this year totaled 235 billion won, the largest among internet-only banks and the second-largest in the entire banking sector.
Toss Bank also posted a 34.2% average balance ratio and a 32.7% new loan ratio for mid- to low-credit borrowers in the second quarter.
The three internet-only banks have been offering loans to mid- to low-credit borrowers on better terms through their own credit scoring models.
KakaoBank Corp explained, "Continuous lending to mid- to low-credit borrowers was possible thanks to the advancement of our data-based credit scoring model and our risk management capabilities." It added, "By using non-financial data to additionally identify mid- to low-credit borrowers who had been rejected under models centered on financial information, we are improving the accuracy and inclusiveness of credit assessment for financially underserved groups."
K Bank is also continuing to strengthen financial support for vulnerable groups, as well as small business owners and self-employed workers, to expand inclusive finance. In June, it signed a business agreement with Kwangju Bank to cooperate on developing and operating joint financial products for mid- to low-credit borrowers and customers with limited credit history, known as thin-file customers. The two banks agreed to provide broader financial opportunities for mid- to low-credit borrowers through screening and post-loan management using their credit scoring models, or CSS.
Through its own credit scoring model, or TSS, Toss Bank is precisely evaluating the repayment ability of mid- to low-credit borrowers who have had difficulty being fully assessed under existing credit evaluation systems, while improving financial access. Among mid- to low-credit borrowers who took out loans from Toss Bank in the second quarter of this year, 44% saw their credit scores from external credit rating agencies rise by an average of 43 points one month after the loan was executed.

[email protected] Lee Hyun-jung Reporter