Korean private credit, explained for global investors

What is Korean private credit?

Korean private credit is lending to Korean borrowers — consumers and small businesses — by non-bank lenders rather than by traditional banks or public bond markets. A meaningful part of it is originated through online platforms that connect investors directly to borrowers, the segment commonly called P2P (peer-to-peer) lending, and known in Korea as online investment-linked finance (온투업).

The regulated online segment is sizeable but specific in scope. As of end-August 2025 the online investment-linked finance industry’s combined outstanding loan balance was reported at roughly KRW 1.31 trillion (about USD 1 billion at then-prevailing rates), per industry reporting citing online investment-linked finance disclosure data (Sisa Journal-e, 2 Sep 2025); separate reporting puts the number of registered operators at 52 (Korea Economic Daily, 21 Oct 2025). That figure covers only the regulated online segment — it is not a measure of all Korean non-bank private credit, which also spans savings banks and other non-bank lenders outside the online investment-linked finance regime.

These loans are typically secured against collateral. The asset types root64 works with, for example, include real-estate-secured consumer loans and securities-account-collateralized loans. The common thread is that the return comes from borrowers repaying principal and interest, not from market price movements.

How is Korea’s online lending market regulated?

It is governed by a dedicated statute: the Act on Online Investment-Linked Financial Business and Protection of Users (온라인투자연계금융업 및 이용자 보호에 관한 법률), which the regulator refers to in short as the Online Investment-Linked Finance Act (온투법). It took effect on 27 August 2020 and is supervised by Korea’s Financial Services Commission (FSC).

It is a registration regime with concrete prudential and investor-protection rules. Per the FSC’s release on the Act taking effect, the headline requirements include a cap on the lending interest rate at the statutory maximum under the Credit Business Act (24% when the release was published in 2020; Korea’s legal maximum rate has since been lowered to 20%, effective 7 July 2021), a single-borrower exposure cap set at the lesser of 7% of a platform’s total P2P loan balance or KRW 7 billion, mandatory segregation of investor funds at qualified depositories (banks, securities finance companies, or savings banks with equity capital of KRW 1 trillion or more), and outright bans on pre-funding loans, covering investor losses, and running maturity mismatches (FSC, 26 Aug 2020).

The regime also tightly caps retail exposure. An individual investor faces a total cap of KRW 40 million across all P2P platforms and KRW 5 million per individual loan; only income-eligible investors — annual earned income over KRW 100 million, or interest and dividend income over KRW 20 million — qualify for higher limits of KRW 100 million total and KRW 20 million per loan (Korea Economic Daily, 21 Oct 2025). These tight retail caps are part of why the market is built around (limited) resident investors, and why institutional and qualified-transferee channels matter for anyone seeking larger exposure.

The registration requirement drove a sharp consolidation. The pre-Act P2P industry numbered around 241 firms as of June 2020 (Korea Capital Market Institute (KCMI), 12 Oct 2020); when the Act’s registration deadline arrived on 27 August 2021, only 28 operators had completed registration (7 earlier registrants plus 21 more), out of 40 firms that had applied (Kyunghyang Shinmun, 27 Aug 2021). The registered base has since grown to the 52 operators noted above. For a foreign investor, the takeaway is that this is a supervised, licensed market with hard investor-protection rules and a vetted operator set, not an unregulated corner of fintech.

Why is it hard for global investors to access?

Because Korea’s inbound-investment rules are built around listed securities, and the domestic lending market is built around resident investors — so there is no established channel for a non-resident to buy these loan assets directly. Three constraints stack up:

• No defined channel. Korea’s foreign-investment framework is scoped to listed securities — shares, bonds, and the like (Bank of Korea). It does not provide a route for non-residents to invest in loan receivables or unlisted lending products.
• Domestic plumbing. The online lending model runs on Korean-won real-name accounts at a domestic custody institution. Non-residents face significant friction opening those accounts.
• Transfer restrictions. Under the Online Investment-linked Finance Act, the right to receive a loan’s principal and interest can only be transferred to qualified transferees (institutional investors and the like) — not freely to any foreign buyer.

On top of these access constraints sit the practical barriers that make the asset class unfamiliar to foreign capital in the first place:

Barrier	What it means for a foreign investor
Unfamiliar assets	Korean collateral types, loan structures, and recovery procedures are hard to evaluate from outside
Multi-layer counterparty risk	Capital would pass through several entities, each opaque from abroad
No independent verification	Conventional reporting is periodic, leaving gaps between reports
Currency exposure	Capital is in dollars (or stablecoins); the loans are in Korean won
Limited liquidity	Loan assets are held to maturity; they are not freely tradable

Source: root64 product strategy, problem analysis, as of June 2026.

Note one thing these constraints are not: a blanket legal ban on foreigners investing in Korean credit. The issue is the absence of a clean, defined channel plus practical banking and currency friction — which is precisely the gap an offshore structure is designed to close.

Are global investors engaging with Korean private credit?

Increasingly, yes — though mostly in one direction so far. Global private credit is a large and fast-growing asset class: Preqin projects the market to reach USD 2.64 trillion by 2029, up from USD 1.50 trillion at end-2023 (Pensions & Investments, citing Preqin’s Future of Alternatives 2029, Dec 2024). That growth is pushing global managers to hunt for new credit exposures, including in Korea.

The recent moves into Korea bear this out. In reporting by KED Global, Samsung Securities has served as the exclusive Korea distributor of Blackstone’s private credit funds since June 2025, Mirae Asset Securities partnered with Hamilton Lane in February 2025 to roll out similar products, and Korea Investment & Securities was exploring a tie-up with US private credit specialist Muzinich & Co. (KED Global, 29 Aug 2025).

These moves are mostly about global private credit funds being distributed into Korea — related to, but distinct from, foreign capital reaching Korean loan assets. They are noted here only as market context (root64 is not affiliated with the firms named). And this inbound flow is now itself drawing regulatory caution: in March 2026 the Financial Supervisory Service (FSS) summoned around 20 executives from 10 securities firms and fund managers over private credit fund risks — flagging weak risk measurement of non-marketable assets and sales that overemphasized yield — after Korean investor holdings of such funds reached about KRW 17 trillion in 2025 (up from KRW 13.8 trillion in 2024), with retail holdings rising sharply (Seoul Economic Daily, 4 Mar 2026). What has been missing — and what that one-directional flow underscores — is a route in the other direction: a way for global capital to access Korean loan assets themselves.

How does an offshore structure bridge the gap?

By holding the assets in Korea and connecting global capital from outside it. In root64’s model, a Korean special-purpose company holds the loan assets domestically, satisfying the local transfer and custody rules, while an offshore vehicle is the planned route through which global professional investors would participate. That offshore tier — a Hong Kong vehicle — is planned and not yet formed, and any token issuance through it is contingent on regulatory clearance.

root64 also adds a layer the conventional market lacks: it records the assets’ cash flows on a public blockchain and logs each external verification on-chain, so an investor can check the state of the assets independently rather than waiting for periodic reports. The structure is built transparency-first; tokenization is designed to come on top of that foundation.