Lending services for foreign nationals becomes next battleground for banks

Korean banks are expanding lending services to foreign residents as they seek to tap a growing customer base beyond traditional services such as bank accounts and overseas remittances, industry officials said Tuesday.

The shift reflects intensifying competition for foreign customers, including migrant workers and international students, as lenders broaden their offerings to include loans.

Major commercial banks have rolled out dedicated loan products for foreign borrowers in recent years.

Hana Bank launched the Hana Foreigner EZ Loan in August for E-7 and E-9 visa holders, offering loans of up to 10 million won ($7,500) for terms of up to 30 months. Shinhan Bank introduced its SOL Global Loan with a maximum limit of 20 million won, while NH NongHyup Bank rolled out its K-Foreigner Credit Loan, which offers loans of up to 30 million won to foreign borrowers.

Regional lenders have established an early foothold in the market.

Jeonbuk Bank, based in North Jeolla Province, launched loan services for foreign customers in 2016 and introduced online lending services in 2023. Kwangju Bank, BNK Kyongnam Bank and iM Bank also offer loans targeting foreign workers and international students.

Notably, JB Financial Group, the parent company of Jeonbuk Bank and Kwangju Bank, has seen loan services for foreign nationals grow steadily.

According to data provided by the financial group, Jeonbuk Bank's outstanding loans to foreign customers rose to 664.8 billion won as of June, up from 349.5 billion won in 2023, while Kwangju Bank's balance increased to 70.6 billion won from 50.7 billion won at the end of 2025.

"Loan services for foreign nationals presents a promising opportunity for regional banks, as the market remains relatively untapped by major lenders," a JB Financial Group official said.

"With the number of foreign residents in Korea nearing 3 million, driven by an increase in foreign workers, demand for financial services among non-Korean residents is expected to continue growing," the official said.

Internet-only banks are also eyeing loan services for foreign residents.

Last week, KakaoBank launched services for foreign customers, including checking accounts, debit cards and overseas remittances. The bank said it plans to consider introducing loan products next year after further review.

However, industry officials say assessing foreign borrowers' creditworthiness remains a challenge as many have limited credit histories in Korea. Recovering unpaid loans can also be difficult once borrowers leave the country.

Currently, banks assess foreign loan applicants based on factors such as visa status, time remaining on their visas, employment history and income records. Financial firms are also exploring ways to supplement gaps in domestic credit data with credit information from borrowers' home countries.

"Lending services for foreign nationals is certainly a promising market, but assessing their creditworthiness is more challenging than assessing that of Korean customers," an industry official said. "Developing credit assessment systems tailored to foreign customers will be essential in order to provide various products for them."