Business · Companies · 2 hrs ago
Study Finds Online Banks Expanded Credit Access but Debt Relief Is Unclear
Toss Insight studied lending by South Korean online banks and how it affected borrowers with mid-to-low credit scores.
The researchers used individual data on about 2.15 million people from 2016 to 2025.
About 31% of new loan accounts went to people with no loan in the previous quarter, suggesting the banks opened new routes to credit.
For some borrowers who moved away from high-interest lenders, average rates fell by more than five percentage points.
But the study found limited evidence that banks' lending targets reduced borrowers' debt or interest burdens, and these loans were more sensitive to policy rate changes than loans to higher-credit borrowers.
The lending target is due to rise to 35% in 2028, and the study recommends tying banks' responsibilities to their results and risks, while adjusting targets to economic and interest-rate conditions.
A Toss Insight study found that internet-only banks expanded credit access for borrowers with mid- to low credit scores, but evidence that this reduced borrowers’ debt burdens was limited.
About 31% of new unsecured loan accounts went to borrowers who had no such loan in the previous quarter.
Borrowers who moved from high-interest lenders saw their rates fall by an average of more than 5 percentage points.
The study said lending targets increased credit supply but did not clearly show that borrowers’ debt burdens improved.
It recommended linking banks’ supply responsibilities to both their policy contribution and the risks they take.
- Who
- Toss Insight, the financial research institute of the Toss financial platform, conducted the study. It examined internet-only banks and borrowers with mid- to low credit scores.
- What
- The study assessed whether internet-only banks expanded credit access and whether lending targets improved borrowers’ debt burdens.
- When
- The report was announced on November 5, 2026. The analysis used data from 2016 to 2025.
- Where
- South Korea.
- Why
- The study examined the effects of internet-only banks’ lending and supply targets, and how to balance borrowers’ benefits with sustainable credit supply.
This story does not have two clearly opposing sides.
Researchers analyzed individual-level data on about 2.15 million people.
Toss Insight announced the publication of its report on lending to borrowers with mid- to low credit scores.
The target share for newly issued loans is scheduled to rise to 35%.
- Data period
- 2016–2025
- Sample
- About 2.15 million people
- New loan accounts
- About 31% went to borrowers without an unsecured loan in the previous quarter
- Rate reduction
- More than 5 percentage points on average for borrowers moving from high-interest lenders
- Target share
- Scheduled to reach 35% in 2028
What people are saying
The results of inclusive finance should be assessed by examining both expanded credit supply and improvements in borrowers’ debt burdens.
We need to improve systems for recognizing performance and sharing risk so that people who need credit can use it steadily on appropriate terms.