Korea's best bank for SMEs 2019: KB Financial Group
KB Financial Group
The last year has been an interesting one for small and medium-sized enterprises in South Korea. According to the government, SMEs account for 99% of the country’s businesses, 88% of its total employment, 38% of exports and 51% of added value. In 2018, South Korea’s Financial Services Commission announced that new rules governing loan-to-deposit ratios would go into effect at the start of 2020 for the country’s banks, encouraging more lending to small businesses. With such support, SME banking has boomed.
KB Financial Group has led the way in SME lending growth. The bank’s SME loans increased by W8.9 trillion ($7.5 billion), or 10% year on year – a higher growth rate than its peers. KB Financial also made efforts to improve its loan quality control. At the end of 2018, 74.7% of the bank’s loans were given to healthy SMEs, as opposed to 70.8% the previous year.
KB Financial has also eased the paths of doing business for its SME clients. KB Star CMS, launched in June 2018, gives corporate customers access to their funds deposited at other banks. KB OneTrade, an online trade platform for automatically processing export and import documents, and KB Seller Loan, a fast-loan product for small online shop owners, were launched in the following months.
The bank now also offers a foreign money transfer service as well, an area it has tried to market to more SMEs this year.
These initiatives accompany KB Financial’s digitalization and its efforts to streamline its business activities. The bank is ambitious about its plans to use digital approaches, including apps, to give customized services to SMEs and small business owners.
With the government prioritizing SME funding, the sector is of great importance. KB Financial is well-positioned to serve these clients, and boost its own business in the process.