Korea stepping-stone loans jump 145-fold, but big banks hold under 1%
In short
New lending under South Korea's stepping-stone loan programme for policy microfinance borrowers reached 14.11 billion won in January–August 2026, 145 times the 97 million won lent in all of 2025, according to Financial Supervisory Service data given to a lawmaker. But 91.9% of it came from iM Bank and Industrial Bank of Korea, while the four largest commercial banks accounted for 9 loans worth 130 million won, or 0.9% of the total. Rep. Park Min-kyu said the authorities have set no supply target and the big banks are effectively turning away from the programme.
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New lending under the government's stepping-stone loan programme reached 14.11 billion won in the first eight months of 2026, up from 97 million won in all of 2025, according to Financial Supervisory Service data submitted to Rep. Park Min-kyu of the Democratic Party on the National Assembly's Political Affairs Committee. Yonhap and Asia Economy both reported that the programme recorded 854 loans in the period, with an outstanding balance of 12.797 billion won at the end of August. [ 1 , 2 ]
The stepping-stone loan is part of a credit build-up system that lets users of government microfinance who repay diligently obtain bank credit at interest rates within 9% a year. The government eased some eligibility requirements late last year while requiring applicants to undergo an integrated credit evaluation model, and encouraged banks and users to take part. Yonhap reported that annual lending had shrunk from 172 million won in 2021 to 34 million won in 2024 before rising to 97 million won in 2025. [ 1 , 2 ]
The growth has been concentrated. iM Bank lent 6.99 billion won and Industrial Bank of Korea 5.977 billion won, together 91.9% of the total, both reports said. The four largest commercial banks — KB Kookmin, Shinhan, Woori and Hana — accounted for 9 loans and 130 million won, 0.9% of the total. Woori lent 80 million won, Shinhan 34 million won and KB Kookmin 16 million won, while Hana made no new loans this year and said it handles such borrowers through alternative products. Nonghyup Bank lent about 259 million won. [ 1 , 2 ]
Park said the financial authorities had not even set a supply target and that the four major banks were effectively ignoring the programme, calling for practical measures to induce bank lending. Asia Economy also quoted him saying banks should fulfil their social responsibility for middle- and low-credit borrowers. Yonhap reported that banks and the financial authorities attribute the low uptake by major banks to their focus on expanding their own inclusive-finance products such as Saeeheemang Holssi, and that the five largest banks supplied about 3 trillion won of that product last year, 75.2% of the banking sector's total. [ 1 , 2 ]
Park's office said the Korea Inclusive Finance Agency estimates annual demand for new stepping-stone loan funds at 348,000 people and 12.5 trillion won, far above current bank lending. Neither document includes comment from the four major banks beyond Hana's stated position, or from the Financial Supervisory Service. [ 1 , 2 ]
Why it matters
The figures measure how far a government push to move policy microfinance borrowers into the banking sector has gone: lending is rising fast from a very low base but remains far below the estimated annual demand of 348,000 people and 12.5 trillion won. With two banks supplying most of the loans and the four largest lenders barely taking part, the programme's reach depends on a few institutions, and the lawmaker's call for supply targets points to possible regulatory pressure on banks. Both documents frame the issue as access to credit for middle- and low-credit borrowers.
Key facts
- Bank lending under the stepping-stone loan programme totalled 14.11 billion won in January–August 2026 across 854 loans, with a 12.797 billion won outstanding balance at the end of August. [ 1 , 2 ]
- That is 145 times the 97 million won lent in all of 2025; annual lending had fallen to 34 million won in 2024 from 172 million won in 2021. [ 1 , 2 ]
- iM Bank, at 6.99 billion won, and Industrial Bank of Korea, at 5.977 billion won, together made up 91.9% of this year's lending. [ 1 , 2 ]
- The four largest commercial banks — KB Kookmin, Shinhan, Woori and Hana — accounted for 9 loans and 130 million won, 0.9% of the total. [ 1 , 2 ]
- Hana Bank made no new stepping-stone loans this year and said it handles such borrowers through alternative products such as Saeeheemang Holssi and mid-rate loans. [ 1 , 2 ]
- The Korea Inclusive Finance Agency estimates annual demand for new stepping-stone loan funds at 348,000 people and 12.5 trillion won, according to the lawmaker's office. [ 1 , 2 ]
Confirmed by several sources
- Stepping-stone loan disbursements in January–August 2026 were 14.11 billion won over 854 loans, with a 12.797 billion won balance at end-August, per Financial Supervisory Service data submitted to the National Assembly's Political Affairs Committee. [ 1 , 2 ]
- iM Bank and Industrial Bank of Korea accounted for 91.9% of this year's lending, at 6.99 billion won and 5.977 billion won respectively. [ 1 , 2 ]
- The four largest commercial banks made 9 loans worth 130 million won, 0.9% of the total: Woori 80 million won, Shinhan 34 million won, KB Kookmin 16 million won and Hana none. [ 1 , 2 ]
- The data was submitted by the Financial Supervisory Service to Rep. Park Min-kyu of the Democratic Party on the National Assembly's Political Affairs Committee. [ 1 , 2 ]
- Rep. Park said the financial authorities have set no supply target and that the four major banks are effectively ignoring the programme, and called for practical measures to induce bank lending. [ 1 , 2 ]
Still unclear
- Why the four largest banks' share of the programme is so small Yonhap reported that banks and the financial authorities attribute it to major banks concentrating on their own inclusive-finance products, but neither document carries direct comment from KB Kookmin, Shinhan, Woori or the Financial Supervisory Service.
- Whether the authorities will set a supply target for the programme Rep. Park said no supply target has been set; the documents do not say whether the Financial Services Commission or the Financial Supervisory Service plans to introduce one.
- The five largest banks' 2025 supply of about 3 trillion won of Saeeheemang Holssi loans, 75.2% of the banking sector's total This figure appears only in Yonhap's report and is used there to explain why major banks lend little under the stepping-stone programme.