Succession becomes SME banking’s next frontier in South Korea
Woori Bank’s Corporate Succession Support Center is a key pillar of its SME strategy in Korea, combining advisory and financing to turn succession into both a continuity challenge and a growth opportunity for SME banking.
South Korea is entering a quiet but profound turning point for its small and mid-sized business sector—one that could reshape the country’s industrial fabric over the next decade.
Today, the average SME owner in Korea is 55 years old. More than one in three (33.3%) are already aged 60 or older, and over 70% are above 50, underscoring the rapid aging of business leadership across the country.
An estimated 675,000 SMEs are currently at risk of uncertain continuity because they do not have a clearly identified successor Korea Small Business Institute (KOSI) succession risk analysis. In manufacturing alone, more than 56,000 companies lack a succession plan—and a large share of them are located outside Seoul, raising concerns about regional economic stability, employment, and industrial competitiveness Korea Small Business Institute (KOSI) SME succession report.
The issue is not only structural but also generational. According to the Korea Federation of SMEs’ 2024 succession survey, 38.8% of owners who are not planning to pass on their business say their children do not want to take over. Another 26.9% say they themselves do not want to place that burden on the next generation Korea Federation of SMEs (KBIZ) – 2024 succession survey.
The scale of what is at stake is significant. The Korea Small Business Institute estimates that up to 320,000 SMEs could disappear over the next decade if succession challenges are not addressed—putting nearly 3 million jobs at risk KOSI SME outlook report.
Against this backdrop, succession is no longer a niche planning issue for business families. It is becoming a national economic priority—and a growing strategic opportunity for banks.
Among them, Woori Bank is betting that helping companies navigate ownership transitions will become a key driver of future growth and differentiation.
Woori Bank’s bet on SME succession
Woori Bank is positioning SME succession as a new growth pillar, moving beyond traditional lending into what it calls “productive corporate succession”—an effort to keep viable companies alive as Korea’s first-generation founders approach retirement without clear successors.
At the center of this shift is a broader economic framing. Speaking in Seoul, CEO Jung Jin-wan described succession as more than a private business issue. “Corporate succession is not just a priority for individual companies, but a critical economic task directly tied to preserving jobs, retaining technology, and stabilizing industry supply chains,” he said Yonhap News / Korea policy briefing coverage.
To act on this, Woori Bank launched its Corporate Succession Support Center in February, the first dedicated unit of its kind in Korea’s banking sector. The center brings together expertise in accounting, tax, M&A, and corporate finance to support SMEs through different transition paths, including family succession, management buyouts, employee buyouts, and third-party sales Woori Bank official announcement / Corporate Succession Support Center.
Around this platform, the bank has also built an external network with partners such as Kim & Chang, Samil PwC, and the Korea Technology Finance Corporation, combining legal, tax, and financing capabilities into a more integrated advisory framework Korea Technology Finance Corporation (Kibo) partnership materials.
The urgency is clear in the companies already engaging with the program. Woori has signed 554 succession-related MOUs and provided consulting to 102 firms so far. More than 70% of participating CEOs are in their 50s or 60s, while over 20% are already in their 70s. Although just over half still expect to pass their business to their children, nearly 44% have not yet chosen a succession method Korea Federation of SMEs (KBIZ) / Woori engagement data summary.
For Woori, the challenge is as much about timing as execution. Jung stressed that succession requires long-term preparation rather than short-term fixes. “This is not something that can be done in one or two years,” he said. “We need to look at the company over a horizon of at least 10 years.”
The scale of the commitment is significant. The bank is considering mobilizing more than 3 trillion won (about $2 billion) over five years through guarantees, acquisition finance, loans, and dedicated funds, with a target of supporting succession planning for 2,500 firms Seoul Economic Daily – SME succession policy coverage.
Beyond financing, Woori links the initiative to broader economic impact. Its research institute estimates that enabling succession in 500 companies could help preserve more than 10,000 jobs and generate substantial production and sales effects Woori Financial Research Institute estimates (via Korean policy reporting).
As Yun Seong-hu, Director General of the Corporate Succession Support Center, summarized, the goal is simple but ambitious: ensuring continuity rather than disruption, and helping SMEs evolve into long-term, stable businesses.
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