As of the end of 2023, paid workers in South Korea—Asia’s fourth-largest economy—held an average of 51.5 million won (approximately US$35,000) in combined bank and non-bank loans per person. (Image created by AI/ChatGPT)
SEOUL, March 27 (Korea Bizwire) — The average debt held by wage workers in South Korea edged up in 2023 from the previous year, despite a rise in the benchmark interest rate, partly due to government-funded low-interest loan programs for low-income individuals, the statistics agency said Thursday.
The average bank and non-bank loans extended to paid workers in Asia’s fourth-largest economy stood at 51.5 million won (US$35,000) per person as of end-2023, marking a 0.7 percent rise from a year earlier, data from Statistics Korea showed.
The debt level had declined by 1.7 percent on-year in 2022 following three consecutive years of sharp on-year growth amid the COVID-19 pandemic.
“It is common for loan volumes to increase when the benchmark interest rate falls. However, the slight rise in 2023 can be attributed to government-backed loan programs introduced to support small business owners and low-income individuals in the aftermath of the pandemic,” said Choi Jae-hyuk, an official at the agency.
The benchmark interest rate had dropped to the 1 percent range in 2021, with the rate subsequently rising to the 2 percent range in 2022 and further to the 3 percent level in 2023.
By lender type, bank loans to wage workers rose 1.7 percent on-year in 2023, while non-bank loans declined 1.2 percent.
Mortgage loans taken out by wage workers increased 3.7 percent in 2023, while other types of loans grew 2.1 percent, the agency said.
The data also showed that male wage workers held an average per capita debt of 63.8 million won in 2023, 1.72 times higher than that of female employees.
Workers in their 40s had the highest per capita debt at 77.9 million won, followed by those in their 30s with 69.8 million won and those in their 50s with 59.9 million won.
Meanwhile, the loan delinquency rate for wage workers rose by 0.08 percentage point on-year to 0.51 percent in 2023, according to the data.
(Yonhap)
