Card issuers turn to small-business lending as consumer loan curbs squeeze growth

As Korea’s financial authorities continue tightening their grip on household debt, card issuers are looking beyond personal card loans for growth, with many expanding into lending for sole proprietors and small-business owners, according to industry officials Thursday. In recent years, card companies have relied on card loans to offset slowing growth in their transaction fee incomes. Carrying higher interest rates than bank loans but requiring no collateral, these have become a popular source of quick funding for borrowers with limited access to mainstream credit. That appeal has also made them a target of regulators. Authorities regard card loans as a significant contributor to household leverage and have sought to restrain their growth as part of a broader campaign to curb debt accumulation and cool speculative demand in the property market. Pressure on the sector intensified this week after several major card issuers exceeded regulatory targets for outstanding card loan balances. The Financial Supervisory Service summoned the companies on Monday and urged them to strengthen interna