SEOUL, Oct. 23 (Korea Bizwire) — About 520,000 people, or 1.3 percent of South Korea’s population, were believed to have borrowed money from loan sharks last year, a survey showed Tuesday.
They borrowed an estimated 6.8 trillion won (US$6 billion) from unregistered lenders at the end of last year, according to the survey of 5,000 people aged between 19 and 79, conducted by the Gallup Korea.
The maximum interest rate that private lenders can charge customers was lowered to 24 percent per annum in February.
But some loan sharks charge as much as 120 percent, according to the Financial Services Commission (FSC), which commissioned the survey.
Men aged between 40 and 60 were believed to be the major customers of illegal private lending as they desperately needed money for business or livelihood-related expenses, according to the survey.
The FSC said it will further tighten the rules on illegal private lending, which can exert a considerable burden on people.
Earlier this month, the FSC said it will gradually cut the maximum legal lending rate to 20 percent per annum.