The value of delinquent loans among self-employed individuals in South Korea has surged by nearly 50% in a year. (Image courtesy of Kobiz Media)
SEOUL, Mar. 6 (Korea Bizwire) – The value of delinquent loans among self-employed individuals in South Korea has surged by nearly 50% in a year, with the delinquency rate of young self-employed individuals in their 20s and 30s increasing the fastest.
This trend indicates that self-employed individuals are facing financial difficulties due to high interest rates and other economic pressures.
According to data from the credit rating agency NICE Information Service, as of the end of last year, 3,358,499 self-employed individuals had a total of 1,109 trillion won in loans from financial institutions, marking a 2.6% increase in borrowers and a 2.5% increase in loan balance compared to the end of 2022.
Delinquent amounts (overdue for three months or more) soared from 18 trillion won to 27 trillion won, a 49.7% jump. The average delinquency rate also rose by approximately 0.8 percentage points, from 1.69% to 2.47%.
The situation is particularly dire for younger self-employed individuals. Among those with multiple debts, 20-year-olds had the highest delinquency rate at 6.59%, while the delinquent amount for those in their 30s increased by 62.5%.
However, it is important to note that the data from NICE Information Service calculates the delinquency rate based on the total loan amount of delinquent borrowers, which may result in a higher delinquency rate than the government’s method, which is based on the actual amount of delinquency.
According to the Bank of Korea, the delinquency rate as of the third quarter of 2023 stood at 1.24%.
M. H. Lee (mhlee@koreabizwire.com)
