South Korean banks remained reluctant to make loans to small- and medium-sized enterprises (SMEs) in February despite emerging signs of a recovery in the domestic economy, the central bank said today.
Outstanding bank lending to SMEs amounted to 237.8 trillion won (US$237.1 bn) as of the end of February, up a mere 254 billion won from the previous month, the Bank of Korea (BOK) said.
The gain was only one-tenth of the 2.1 trillion won jump for the same month a year ago, the central bank said in a report on financial market trends.
"Banks stay unwilling to lend money to SMEs since a prolonged slump in the domestic economy has left many unable to service existing debts," the central bank said.
Lenders' unwillingness indicates that heightened expectations for an economic recovery are not translating into an actual gain in production, it said.
