Banks' Technology Credit Loans Increase by 13 Trillion Won in the First Quarter Alone

IBK 99 Trillion Won at the End of March, the Highest Amount

[Asia Economy Reporter Song Hwajeong] Bank technology credit loans have been steadily increasing since turning to an upward trend earlier this year. As companies can secure funds at lower interest rates than general loans even with low credit ratings by using their technological capabilities as collateral, the demand for related technology credit loans is expected to continue expanding.

According to the Bankers Association on the 31st, the outstanding balance of technology credit loans from 17 special, commercial, and regional banks totaled 329.8104 trillion KRW as of the end of March. This represents a 16.83% increase compared to the same period last year. In the first quarter alone, the balance increased by 13.4489 trillion KRW. The outstanding balance of technology credit loans had been steadily rising but slightly decreased in December last year; however, it turned upward again this year and has increased for three consecutive months.

Among banks, the Industrial Bank of Korea (IBK) had the largest amount of technology credit loans, with an outstanding balance of 98.9104 trillion KRW as of the end of March. IBK’s technology credit loans, which were in the 87 trillion KRW range in March last year, showed steady growth, surpassing 90 trillion KRW in May last year, and is now on the verge of exceeding 100 trillion KRW. The combined outstanding balance of technology credit loans at the four major commercial banks?KB Kookmin, Shinhan, Woori, and Hana?was 176 trillion KRW, increasing by 6 trillion KRW this year. KB Kookmin Bank had the largest amount among the four, with 46.8284 trillion KRW, followed by Shinhan Bank with 45.9811 trillion KRW, Woori Bank with 44.4563 trillion KRW, and Hana Bank with 39.0024 trillion KRW.

Technology credit loans are a system that supports small and medium-sized enterprises (SMEs) or startups lacking collateral or credit to obtain loans by using their technological capabilities as collateral. The banking sector has been actively providing technology finance since 2014. These loans have lower interest rates and higher loan limits than general corporate credit loans, helping companies with insufficient funds. Especially after COVID-19, as corporate funding demand has increased and with recent inflation and interest rate hikes, the number of companies seeking technology credit loans is expected to continue rising. A representative from a commercial bank said, "Recently, banks have been expanding supply by increasing personnel for technology finance evaluation," adding, "It is also positive in terms of preemptively supporting startups with high growth potential and securing customers."

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