Overdue payments by SME’s, lowers bank lending to small firms
The number of commercial banks lending to small- and medium-sized enterprises (SME’s) have been decreasing lately, despite plans to the contrary in light of the government's toughening of home equity loan regulations, industry data showed yesterday. As of the end of last month, the aggregate loans to SMEs by the country's five major banks including Kookmin, Shinhan and Woori totalled 114.4 trillion won ($110 billion), down 260 billion won ($240 million) recorded a month earlier. Kookmin Bank, the largest lender in Korea, reduced its SME loans by more than 2.5 trillion won ($2.4 billion) during the first nine months of the year. Its SME lending stood at about 35.4 trillion won ($33.9 billion) at the end of 2004 but fell to 32.8 trillion won ($31.4 billion) at the end of September.
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