At the End of Last Year, Tech Finance Loans Totaled 266.9 Trillion Won... Companies and Hana Bank Rated 'Excellent'

Excellent Performance in Technology Finance Evaluation by Kieop, Hana, Gyeongnam, and Busan Banks

[Asia Economy Reporter Park Sun-mi] As a result of the banking sector actively responding to technology finance, the outstanding balance of technology finance loans reached approximately KRW 266.9 trillion at the end of last year. In the evaluation of the banking sector's technology finance performance, Industrial Bank of Korea and Hana Bank were rated excellent among large bank groups, while Kyongnam Bank and Busan Bank were rated excellent among small bank groups.

According to the "Second Half of 2020 Banking Sector Technology Finance Performance and Bank Self-Evaluation Capability Review Results" released by financial authorities on the 31st, the outstanding balance of technology finance loans in the banking sector recorded KRW 266.9 trillion at the end of last year, increasing by more than KRW 61 trillion from KRW 205.5 trillion at the end of 2019. This accounts for about 31.9% of SME loans. In particular, the performance of intellectual property (IP) and movable collateral increased from KRW 634.5 billion at the end of 2019 to KRW 1.0039 trillion at the end of 2020, expanding the supply channels for innovative finance in areas such as IP and movable assets, whose importance has recently increased.

In the evaluation of the banking sector's technology finance performance, Industrial Bank of Korea and Hana Bank were rated excellent, and among small bank groups, Kyongnam Bank and Busan Bank were rated excellent. Industrial Bank of Korea increased its technology credit loan evaluation amount from KRW 42.7 billion at the end of 2019 to KRW 212.6 billion at the end of 2020, expanding funding supply to innovative SMEs by considering various non-financial factors such as IP. Kyongnam Bank was also evaluated to have continuously expanded technology evaluation-based investments, with a net investment increase of KRW 8.45 billion at the end of last year, a 63% increase.

Separately, as a result of reviewing the self-evaluation capabilities of technology finance for 10 banks, one bank (NongHyup) newly entered 'Level 4,' bringing the total number of banks with excellent self-technology credit evaluation capabilities to nine. Level 4 banks can supply technology finance through their own technology evaluations without any separate restrictions.

The financial authorities plan to continuously support SMEs with technological capabilities by refining the technology finance system in detail this year. In the second half of the year, they will collect opinions from the banking sector and announce a plan to reform the evaluation system by strengthening innovative finance elements such as IP and movable collateral in technology finance performance evaluations and adding evaluations of each bank's efforts.

A financial authority official said, "A standardized technology evaluation model will be prepared and implemented from January next year," adding, "Considering the increasing capabilities of banks' own technology evaluations, an integrated credit model that allows technology evaluations to affect credit ratings and be internalized in credit screening will be gradually introduced."

This content was produced with the assistance of AI translation services.