Kookmin Bank, Korea's largest lender, lowered this year's target growth rates for corporate loans to less than 5 per cent, from earlier predictions of 11.2 per cent
.
The bank's overdue charge on loans to small- and mid-sized enterprises (SME) jumped by 0.26 percentage points to 4 per cent in May.
Total domestic currency denominated loans fell to 821.5 billion won in April and 736.4 billion in May, after topping 1.66 trillion won in March.
Other banks, including the nation's second largest Woori Bank, have slashed their lending amounts.
Woori's outstanding loans to SMEs stood at 750 billion won in May, down from 1.08 trillion won in April, while the figure at Hana also decreased from 350 billion won to 150 billion won. Shinhan Bank saw loans to small firms rise by 590 billion won last month, similar to the 534 billion won growth the previous month.