Only about two in 10 small and medium-sized enterprises expect business conditions to improve next year, according to new survey data.
The Industrial Bank of Korea's 2026 SME Financial Conditions Survey, released Wednesday, found that just 18.2 percent of the 4,500 small and medium-sized enterprises polled expect conditions next year to be better than this year.
Some 56.1 percent said conditions would remain the same, while 25.7 percent expected a deterioration.
The share of respondents anticipating a downturn rose by roughly 10 percentage points from 14.8 percent the previous year.
The report noted that the service sector showed lower proportions of "improvement" and "same" responses and a higher proportion of "deterioration" responses than other industries, reflecting heightened concern about operating conditions. Smaller enterprises were also somewhat less optimistic than mid-sized ones, suggesting they expect 2027 to be a more difficult year.
The share of firms expecting their funding needs to increase next year rose 6.5 percentage points from the previous year to 13.1 percent, while the share expecting no change fell 13.7 percentage points to 57.6 percent. The service sector posted a higher share of firms expecting decreased funding needs and a lower share expecting no change than other industries.
In 2025, 8.8 percent of small and medium-sized enterprises took out new bank loans, averaging 1.17 loans per borrower. Among those whose applications were rejected, 72.1 percent cited insufficient collateral, while 50.5 percent said they had exceeded their credit limit.
An Industrial Bank of Korea official said the bank expects small and medium-sized enterprises to continue facing operational difficulties for now due to domestic and external uncertainties, and pledged to actively provide tailored financial and non-financial services to help them weather the challenges and build a foundation for growth.
hyuk@heraldcorp.com
