The default rate for individual business loans has doubled over the past 10 years... Financial authorities are closely monitoring.

TechubNews · 2026-03-04T21:25:11+00:00

The default rate of bank loans for individual businesses has nearly doubled over the past decade, currently reaching 0.63%, mainly due to slow economic recovery and high inflation and interest rates. Although the absolute value is not high, the ongoing upward trend has raised concerns, and experts are calling for measures to enhance fundamental competitiveness.

TechubNews

2026-03-04 21:25:11

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The default rate on bank loans for individual businesses has nearly doubled compared to ten years ago, and financial authorities are closely monitoring this phenomenon. In the context of a slow economic recovery, this has become a prominent issue.

According to data released by the Financial Supervisory Authority on March 5, 2026, as of the end of December 2025, the default rate for loans to individual businesses in domestic banks was 0.63%. This is a significant increase from the 0.34% default rate at the end of 2015. Notably, this upward trend has continued for nearly four years — reaching a low of 0.16% in 2021, then rising annually to 0.60% by the end of 2024.

The main reason for the rising default rate is the ongoing high inflation and high interest rate environment following the COVID-19 pandemic. These economic pressures have slowed the pace of economic recovery, becoming a key factor in the repayment difficulties faced by individual businesses. In contrast, the default rate for large enterprises has continued to decline during the same period.

Financial authorities believe that although the current default rate for individual businesses is not high in absolute terms, the upward trend warrants caution. Fortunately, the banking sector has some economic buffer capacity alongside profit growth. However, experts point out that economic growth remains heavily dependent on the semiconductor industry, and the recovery of service sectors related to consumption still requires more time.

Some forecasts suggest that the default rate for individual businesses may continue to rise, with economic uncertainty potentially acting as a multiple variable. Various sectors have indicated that the government should adopt measures focused on enhancing fundamental competitiveness rather than relying on short-term liquidity expansion. In the long term, this is expected to bring positive effects for individual businesses.

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