Kabang Suspends Sales of Saetdol Loans for Office Workers... Focuses on Credit-Based Loans

In-house Credit Evaluation Model Enhances Competitiveness of Medium Credit Loan Products
Existing Customers Can Use Until Maturity
Individual Business Owner Saitdol Loans Maintained

[Asia Economy Reporter Minwoo Lee] KakaoBank will stop the new sales of the 'Saitdol Loan for Office Workers' product, which is based on the guarantee from SGI Seoul Guarantee Insurance. The policy is to operate mid-credit loans for office workers only with products based on its own credit. Analysts say this will reduce the burden of guarantee insurance premiums and enable KakaoBank to offer lower interest rates and higher limits on mid-credit loans.

On the 11th, KakaoBank announced that it would stop accepting new applications for the 'Saitdol Loan for Office Workers,' which targets salaried employees, starting from that day. Existing loan customers can use the loan until maturity, and the Saitdol Loan for self-employed individuals will remain unchanged. A KakaoBank official explained, "Customers do not choose the product when applying for a loan; instead, KakaoBank offers its own product that is more advantageous in terms of limits and interest rates than the existing Saitdol Loan, so there is little change from the customer's perspective."

Previously, when KakaoBank launched its customer service in July 2017, it introduced a guaranteed credit loan product backed by SGI Seoul Guarantee Insurance alongside its own credit loans. Since 2019, the product was changed to a policy mid-interest loan to provide mid-interest loans to salaried employees.

The Saitdol Loan is structured so that SGI Seoul Guarantee Insurance fully compensates for losses in exchange for insurance premiums from the bank. Commercial banks have expressed dissatisfaction, saying that after deducting fixed costs such as branch maintenance expenses and SGI Seoul Guarantee Insurance premiums, the product is effectively operating at a loss. On the other hand, KakaoBank, which does not have such fixed cost burdens, is evaluated to have used this as a foundation to accumulate data and experience in mid-credit loans during its early stages.

The results of handling Saitdol Loans have also been reflected in KakaoBank's new credit evaluation model applied since June last year. Based on this, KakaoBank expanded the maximum limit of mid-credit loans up to 100 million KRW and consecutively launched products such as 'Mid-Credit Plus Loan' and 'Mid-Credit Emergency Loan.' As it has advanced its own credit evaluation model, it appears to have adopted a strategy to reduce the burden of guarantee insurance premiums while enhancing competitiveness in terms of interest rates and limits.

Kim Seongsu, head of the credit team at KakaoBank, said, "The Saitdol Loan for Office Workers has served as a catalyst and a solid stepping stone for KakaoBank to introduce and expand mid-credit loans based on its own credit. We will continue to strive to expand financial inclusion for mid- to low-credit customers."

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