Facing fallout from troubled real estate project financing (PF) loans and deteriorating asset quality, the savings bank industry — which has tightened its lending standards — is finding a new breakthrough through collaboration with online investment-linked finance (P2P lending) providers.

PFC Technologies (PFCT) marked the first anniversary of its savings bank-linked investment service by releasing results that are being seen as proof of the model's potential as an alternative financing channel for low- and mid-credit borrowers who have been pushed to the edge of a lending cliff.

According to financial industry sources on the 11th, PFCT has partnered with 17 savings banks over the past year to supply a total of 186.6 billion won in personal credit loans to 10,683 borrowers. Compared to the service's early days — 8 participating institutions and 34.2 billion won in loans — the number of participating institutions has doubled and the loan volume has grown more than 5.5-fold.

The weighted average interest rate on these loans is 11.01% annually, roughly 1.5 percentage points lower than representative policy finance products such as Sunshine Loan (12.52%) and Sasitdol2 (12.5%).

The most notable result is asset quality. While the average delinquency rate across the savings bank industry climbed to over 6% as of the first quarter of this year, the delinquency rate on these linked-investment loans was just 0.37% — achieved even though more than 85% of all borrowers fall in the low-to-mid credit tier, with NICE credit scores in the 600s to 700s.

This is understood to be the result of PFCT's AI-based risk management solution, AIRPACK, which precisely filters borrowers' actual repayment capacity and future default risk even among borrowers within the same credit score band.

Part of the personal credit loans supplied through this linked-investment structure is also being used to meet recent demand for loan refinancing. Through PFCT's refinancing service, the average monthly interest savings per borrower has reached 234,000 won.

Within the savings bank industry, this kind of collaboration is seen as a potential new model of mutual benefit for the private mid-rate loan market, which has been at risk of collapse. Small and mid-sized savings banks — which struggle to handle personal credit loans directly due to their own risk management burdens and regulatory constraints — can indirectly enter the market and diversify their portfolios through P2P-linked investment.