"Relationship Finance" Loan Balance 15.3 Trillion Won... 6.3% Increase Compared to End of Last Year

Low Credit but Good Business Outlook
Loans Provided for Over 3 Years
Relationship-Based Finance Interest Rate 4.91%

As of the end of June, the balance of relational finance was recorded at 15.3 trillion KRW. This represents a 6.3% (900 billion KRW) increase compared to the end of last year (14.4 trillion KRW), providing long-term funds to small and medium-sized enterprises (SMEs) for more than three years.

By borrower type, loans to individual business owners led the growth with a 16.9% (700 billion KRW) increase, while loans to small and medium-sized corporations also rose by 2.0% (200 billion KRW).

According to the Financial Supervisory Service on the 11th, the average interest rate for relational finance was 4.91%, which was 0.37 percentage points lower than the average SME loan interest rate of 5.28%.

The delinquency rate stood at 0.59%, up 0.26 percentage points from 0.33% at the end of the previous year. This level remains stable compared to the pre-COVID-19 period (0.69% at the end of 2019).

In the first half of this year, Shinhan Bank (large-scale) and Daegu Bank (small and medium-scale) were selected as excellent banks.

Relational finance refers to banks comprehensively evaluating quantitative and qualitative information of SMEs and providing loans, equity investments, and management consulting for three years or more to low-credit or under-collateralized companies with favorable business prospects.

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