Online banks surge in small business loans, beat big banks

Internet banks KakaoBank and KB Bank expanded small business owner loans 70% year-over-year in the past 12 months. The five largest commercial banks grew only 0.4% in the same period.

KakaoBank and KB Bank are capturing market share in the underserved small business lending segment. They offer faster approvals and digital interfaces compared to traditional banks. The five largest banks held about 80 times the small business loan portfolio but grew roughly twice as slowly.

Regulatory approval for internet bank lending has accelerated competition in this segment. KakaoBank is a digital-only bank providing checking accounts, savings and lending products to consumers and small businesses.

Sources

  1. Chosun Biz
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