In this photo taken on Sept. 18, 2020, a bank official explains a loan product to a visiting customer. (Yonhap)
SEOUL, Feb. 5 (Korea Bizwire) — South Korea’s ‘bittoo’ fever is spreading rapidly, even to university students and job seekers with no stable income.
Bittoo is the Korean term for borrowing to invest.
This fever engulfed the country starting from last year with lots of people in their 20s and 30s taking out loans to invest in stocks.
A university student surnamed Kim bought stocks, buoyed by last year’s robust stock market rally. He made 5 million won (US$4,450) by doing part-time work and getting student and living expense loans.
“Now I sold my stocks after making about 20 percent profits. At present, I repaid all the loans I took out,” Kim said.
There are even some who made seed money by getting loans under their parents’ names. A job seeker surnamed Jin opened an overdraft account under one of his parent’s names last month and started buying stocks.
“I made some profits. However, whenever I encounter the news that the overheated stock market would collapse sooner or later, it makes my heart sink,” Jin said.
Experts warn that stock investment through borrowing without stable income is more dangerous than other types of bittoo.
“Investment should be made within the range of being able to bear the risk of loss. The more desperate the situation is, the more difficult it is to abide by the principle,” said Kim Sang-bong, an economics professor at Hansung University.
“Once the market bubble bursts, the ‘bittoo’ people, particularly those who have less or no income, would be hit the hardest.”
J. S. Shin (js_shin@koreabizwire.com)
