Korea's banking industry has transformed from a competitive market to a somewhat concentrated market through financial crises. Unlike large corporations, small and medium-sized enterprises (SMEs) are credit-disadvantaged borrowers who are bank-dependent, as they lack diverse alternative funding sources to substitute for bank borrowing, and thus may be more significantly affected by banking industry concentration. Accordingly, this study aims to examine the impact of banking industry concentration on SME bank borrowing. The analysis period spans from 1998 to 2005, during which banking industry market concentration increased following the foreign exchange crisis, and the sample firms are SMEs as defined under Article 2 of the Framework Act on Small and Medium Enterprises among December fiscal year-end companies listed on the Korea Stock Exchange during the same period. The analysis results are as follows. First, a positive (+) relationship was confirmed between banking industry concentration and SME bank borrowing. This indicates that the enlarged banks increased lending to SMEs overall, and that banking industry concentration did not constrain SME financing. Second, a positive (+) relationship was also found between the interaction variable of external funding dependence and banking industry concentration and bank borrowing. This means that firms with higher external funding dependence experienced greater increases in bank borrowing due to banking industry concentration. This study has significance in providing empirical evidence on the relationship between banking industry concentration and SME bank borrowing. The findings of this study demonstrate that the current banking industry concentration has not had a negative impact on the financing of credit-disadvantaged SMEs.