[Reporter’s Notebook] “Just Do It Neatly” Productive Finance... The Pitfall of a ‘Number Game’ Without Standards

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The key topic in the financial sector for 2026 is “productive finance.” In the first quarter of this year (January to March), loans to small and medium-sized enterprises (SMEs) from the five major banks increased by more than 6.3 trillion won compared to the end of the previous year. Loans to large corporations also increased by 8.7127 trillion won. As the government has instructed banks to tighten household lending while expanding loans to productive sectors such as businesses, banks are acting in a coordinated manner. While the financial industry acknowledges that government pressure is indeed burdensome, there is also broad agreement that the flow of money needs to shift away from asset markets such as real estate.

However, it is now up to each bank to determine what constitutes “productive finance.” An executive at a commercial bank said, “We are making decisions on the ground as situations arise.” He explained, “A company that appears to be an ordinary manufacturer on the surface could in fact be a third-tier supplier to an artificial intelligence (AI) company,” adding, “We have no choice but to take such factors into account and aggregate them at the field level.” Even for very small business owners, if their roles in the supply chain allow them to contribute to advanced industry production, they may be classified under productive finance.

This phenomenon appears to stem from the fact that, while “productive finance” has become a buzzword, there is no common standard for its definition. Authorities have yet to present clear, detailed guidelines on what criteria to use in the field to implement productive finance or how to record such results. Each bank is responding by creating its own standards. Woori Bank has distributed detailed guidelines for its loan officers, while KB Kookmin Bank has specified the definition of productive finance using both quantitative and qualitative standards and reflected these in its internal policies.

Industry insiders point out that this is a case of mutual neglect resulting from “strategic ambiguity.” One industry official stated, “Regulators want policy outcomes, while banks want to promote their performance, so neither side wants to strictly limit the definition of productive finance.” This allows banks to claim, based on their own favorable criteria, that “we are number one in support volume,” and enables the government to more easily tout policy success as the aggregated numbers grow. The more ambiguous the standards, the more leeway there is for interpretations such as “if we do it, it counts as productive finance.”

Performance figures compiled without common standards cannot guarantee objectivity or reliability. The same loan could be classified as productive finance by one bank and excluded by another. Whether in government announcements or bank promotions, doubts about the numbers and suspicions of “performance inflation” are inevitable. Without a unified yardstick, comparison and analysis become difficult. Only with detailed classification standards and consistent performance evaluation criteria is it possible to accurately record, assess, and analyze how capital has flowed throughout society during the major shift toward productive finance.

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