IBK Industrial Bank of Korea to Expand Debt Restructuring for Small Businesses by 70%... Support for 500 Companies This Year

Worsening Business Conditions for the Self-Employed Due to High Interest Rates and Delayed Domestic Recovery

Accelerating 'Inclusive Finance' Through Debt Reduction and Interest Rate Adjustments

Expanding Recovery Support: From 300 Companies

IBK Industrial Bank of Korea plans to expand its debt restructuring program for struggling self-employed business owners by approximately 70% this year. As the so-called K-shaped polarization intensifies, with growth concentrated in certain sectors such as semiconductors, and as high interest rates and delayed domestic demand recovery continue, the repayment burden on small business owners has increased. The bank aims to accelerate its “inclusive finance” initiatives by significantly boosting financial support.

According to the financial sector on March 16, IBK Industrial Bank of Korea intends to operate its special debt restructuring program for small business owners this year, targeting 500 businesses. This is a significant increase from the 300 businesses that participated in the program last year.

A bank official stated, “While business conditions for large corporations, particularly those related to semiconductors, have improved thanks to an upturn in the semiconductor industry, small business owners are still facing difficulties. This year, we will proactively identify small business loans experiencing financial distress and support their business normalization by offering interest rate adjustments, maturity extensions, and debt restructuring.”

Currently, IBK Industrial Bank of Korea operates debt restructuring programs such as the “IBK Small Business Mutual Survival Recovery Support” and “IBK Small Business 119plus.”

The IBK Small Business Mutual Survival Recovery Support program is an in-house initiative where the bank directly identifies businesses eligible for restructuring and provides assistance such as debt reduction, interest rate adjustments, maturity extensions, and repayment deferments to support business normalization. The IBK Small Business 119plus program is a system that combines a tailor-made joint debt restructuring program from the banking sector with IBK’s proprietary program.

Through these programs, IBK Industrial Bank of Korea carries out debt restructuring for small business owners with debts of up to 1 billion won, offering interest rate benefits of around 3% per year. Last year, the bank restructured over 100 billion won in debt for 300 businesses.

The decision to greatly expand this year's debt restructuring program comes amid worsening business conditions for the self-employed and growing concerns over loan delinquencies.

According to the Financial Supervisory Service, the delinquency rate on personal business loans at domestic banks reached 0.63% as of the end of December last year. This rate had steadily increased from 0.48% at the end of 2023 and 0.6% at the end of 2024. The delinquency rate for small and medium-sized corporate loans also rose, from 0.48% at the end of 2023 to 0.64% at the end of 2024, and 0.78% at the end of 2025. In contrast, the delinquency rate for large corporate loans remained at around 0.12% at both the end of 2023 and the end of 2025.

Industry experts note that the risk of latent loan defaults, which had been masked by loan maturity extensions and repayment deferments implemented after COVID-19, is now increasingly materializing. They point out that, with growth and investment focused on the semiconductor sector and high interest rates persisting, the economic recovery has failed to reach small business owners, deepening their financial difficulties.

In light of these circumstances, financial authorities are also actively encouraging debt restructuring. The Financial Services Commission plans to reflect the debt restructuring performance of financial institutions in its upcoming comprehensive evaluation system for inclusive finance in the banking sector. In addition, banks will be allowed to recognize the principal reduction resulting from debt restructuring as a loss during the process.

An IBK Industrial Bank of Korea official stated, “Through debt restructuring, we can help small business owners normalize their operations while the bank is able to recover some of its claims. We will continue to expand support for small and medium-sized enterprises and small business owners to further spread inclusive finance.”

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