Inclusive finance scorecard to go public this month, with top banks to earn 'excellence' designation

Financial authorities plan to release a comprehensive inclusive finance evaluation framework for banks this month, setting out how lenders will be scored on their efforts to serve low-income and underserved borrowers.

The framework calls for annual public disclosure of each bank's inclusive finance performance. Key indicators under discussion include the cancellation of delinquent bonds and lending volumes under programs such as Saeheuimang Hollssi and other low-income loan products. Authorities are also considering designating top-performing banks as "excellent banks" — a working title.

According to financial industry sources, authorities plan to unveil the outline of the "comprehensive inclusive finance evaluation framework for banks" at the sixth Inclusive Finance Transformation Council meeting, scheduled for June 25. A kickoff meeting of the Inclusive Finance Strategy Task Force is also set for mid-June.

Authorities first announced plans to introduce the evaluation framework at the inaugural Inclusive Finance Transformation Council meeting in January, saying voluntary competition driven by awards and recognition had proven insufficient to embed inclusive finance as a core banking function.

The original plan called for assessments across four broad categories: organizational structure and strategic direction, low-income finance, small and medium-sized enterprises, and small business owners. However, as legislation for the Act on Promotion of Cooperation Between Large and Small-Medium Enterprises has gained momentum, the SME and small business components are likely to be dropped from the framework, sources said.

As a result, low-income finance indicators are expected to carry even greater weight. Authorities plan to focus their assessment on the share and supply volume of loans targeting low-credit and low-income borrowers — including Saeheuimang Hollssi, policy-backed low-income loans and mid-rate loans — within each bank's total household loan portfolio.

The ratio of such products to total household loans and whether banks meet their targets are expected to be reflected in the detailed evaluation indicators.

Support for borrowers seeking financial recovery is also a key metric. Under a delinquent bond management reinforcement plan announced earlier this year, banks are set to begin disclosing their delinquent bond sales and debt restructuring performance from July, and both will feed into the inclusive finance evaluation.

Whether a bank's internal inclusive finance operations are adequately reflected in its governance structure will also be assessed. As part of that effort, authorities are preparing to require banks to establish a chief inclusive finance officer role and will examine whether banks have built sufficient organizational infrastructure to promote inclusive finance. Employment levels for people with disabilities and other marginalized groups, as well as branch closure procedures, will also factor into the scores.

Authorities intend to evaluate each bank's inclusive finance performance from the previous year at the start of every year and make the results public. This year's inclusive finance supply figures are expected to be included in the first round of assessments.

Incentives under consideration include reductions in mandatory contributions to low-income finance funds and bonus points in local government treasury selection. On top of that, authorities are reviewing a plan to designate top-scoring banks as "excellent banks" — a working title — partly because such recognition could enhance their brand reputation.

With President Lee Jae-myung having recently told a Cabinet meeting that "inclusive finance is an obligation of financial institutions," and the evaluation framework now taking concrete shape, competition among banks in this area is expected to intensify further. Even before the indicators are made public, banks have already begun aligning with the government's direction — canceling delinquent bonds on their own initiative and developing loan products tailored to low-credit borrowers.

The banking sector's response has been broadly positive. While clearer evaluation criteria will sharpen competition among lenders, banks say greater predictability in how the system operates is a welcome development. "Once the indicators are finalized, fiercer competition between banks is inevitable," an official at a commercial bank said. "But we see it positively in that clearer standards will reduce uncertainty."

포용금융·대출 역성장에 금리 문턱 낮추는 은행들…확산 조짐

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