Seo Gyeong-ran, head of the IBK Economic Research Institute, said the biggest challenge facing South Korea is what she called a “downward chain reaction of polarization.” She said global bloc tensions are widening the gap between export industries and domestic-demand industries, deepening differences in companies’ ability to recover and ultimately affecting people’s livelihoods.
“Small firms’ survival is the banks’ survival,” Seo said, calling on lenders to balance productive finance and inclusive finance by learning to assess value beyond financial statements.
The following is a Q&A with Seo.
-최근 대내외 경제 여건이 녹록지 않다. 한국 경제를 짓누르는 가장 큰 부담 요인은 무엇인가.
“Rising exchange rates and oil prices,” she said. Companies that import raw materials to process and export face higher procurement costs, squeezing already thin margins. More firms cannot cover interest with operating profit, which can lead to loan delinquencies, she said. Zombie firms with an interest coverage ratio below 1 have increased for three straight years since 2023 and are expected to rise again this year, she said.
-기업 가운데 중소기업의 연체율이 급등하고 있다. 원인은 무엇인가.
Seo cited three structural problems: shrinking scale, aging and polarization. Large companies are export-oriented, while small and medium-sized enterprises rely on domestic demand, she said, making it hard to build resilience and lowering survival rates. The average lifespan of long-lived companies has recently fallen to 10 years, she said.
She also pointed to aging industrial infrastructure and management. Industrial complexes built for small firms in the late 1960s are now 50 to 60 years old, with high vacancy rates and weak productivity, she said. Many CEOs are 60 or older, but succession and business shifts are difficult, and young workers are no longer coming in, she said. As conditions worsen, corporate lending has concentrated in stronger, high-tech sectors, creating a financing divide that contributes to small-firm failures, she said.
-올해 중소기업들의 건전성 회복은 어려울까.
Small firms’ distress was delayed for about two to three years during the COVID-19 period due to government support, but delinquencies began rising again in 2022, she said. With Middle East war-related risks and tariff policy issues added this year, a prolonged period could increase pressure on soundness and delinquency rates, she said.
-이런 상황에도 은행권은 생산적 금융 차원에서 기업 대출을 늘려야 한다. 어떻게 해야 기업에 도움이 되고 은행도 건전성을 지킬 수 있을까.
Seo said companies can be grouped into four levels by technology: high, upper-middle, lower-middle and low. Bank funding is concentrated in upper-middle and lower-middle firms because that ecosystem is largest and often has collateral such as real estate and factories, she said. High-level firms include many technology-driven companies, while low-level firms include declining sectors such as textiles and apparel, she said.
She said the institute’s role is to identify where funding is concentrated and where it is lacking and to encourage financial support accordingly. She added that the institute is also focusing on research to help banks find ways to support the upper-middle and lower-middle segments while appropriately hedging risk.
-정부와 금융권, 중소기업이 어떻게 역할을 분담해야 시너지가 커질까.
Seo said productive finance and inclusive finance should be pursued together in corporate lending. Narrowly, inclusive finance supports credit recovery for low-income borrowers, she said, but broadly it can include companies facing temporary difficulties due to credit ratings or the business cycle — including firms that temporarily struggle to pay interest.
She said the government should design support systems that reflect these varied situations. The financial sector, she said, should be able to provide funding by assessing nonfinancial factors such as technological capability and CEO competence even when financial ratings are low. Companies also need to present long-term visions, concrete business plans and future directions such as industry shifts, she said. Firms should first seek consulting to raise productivity, with financing attached to build a sustainable structure, she said.
-생산적 금융 싱크탱크 역할을 하며 어떤 것을 최우선 과제로 보고 있나.
Seo said the Industrial Bank of Korea was founded in 1961 and evolved into a specialized lender for small firms as the need for SME support grew. Its creation itself marked the start of inclusive finance, she said. SMEs that were once the target of inclusive finance have grown into key players in productive finance, while some still need inclusion, she said. Finding the right balance between productive and inclusive finance is IBK’s core task, she said.
-기업은행만의 차별화된 지원책은.
Seo said IBK operates the largest corporate consulting center, providing free management diagnostics and connecting companies to policy funds. Based on the belief that small firms’ fortunes are tied to the bank’s, IBK is investing in nonfinancial services, she said. She added that IBK carries a heavy responsibility because it is, in her words, unique worldwide as a listed company dedicated to SME finance that reinvests its profits back into small firms.
-올해 경제성장률은 어떻게 전망하나.
Seo said the International Monetary Fund’s estimate for South Korea’s economic growth this year is 1.9%, below the global average of 3.1%. Many research institutions are warning of downside risks, she said. The institute analyzed five industries closely tied to energy supply chains — coal and petroleum products, electricity, chemical products, nonmetallic minerals, and transportation and warehousing — and found their sales all fell from a year earlier and by more than the overall industry average, she said.
She said restoring potential growth should start with raising productivity and innovation capacity across the broader corporate ecosystem, rather than relying on the performance of a few strong companies.
-앞으로 한국 경제가 집중해야 할 과제는.
Seo said South Korea is already an advanced economy by GDP size and trade volume, but still has unresolved issues in business efficiency, including labor-related challenges. The most urgent issue is demographics, she said. The working-age population began declining in 2020, and low birthrates are constricting the supply of human capital, she said. She called for considering measures such as expanding women’s participation in the workforce, adopting flexible work systems and using foreign labor.
* This article has been translated by AI.
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