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LENDING & CREDIT | Cesar Tordesillas, Malaysia
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Korea's self-employed get 33.9% of SME loans

The amount of money borrowed by self-employed entrepreneurs in South Korea accounted for 33.9 percent of all loans taken out by SMEs.

 

This raised worries that it may weigh on government efforts to curb private sector debt.

South Korean lenders extended loans worth US$137.4 billion to self-employed business-people as of the end of November, from a total of all SME loans that reached 465.2 trillion won, according to the data from the Financial Supervisory Service.

The figure jumped by 12.3 trillion won in the January-November period, accelerating from a 5.4 trillion won gain in the same period a year earlier, the FSS said.

It was also faster growth than the annual increase of 9.1 trillion won in 2009 after the 2008 global financial crisis, the watchdog said.

Meanwhile, the delinquency rate on loans to self-employed borrowers reached 1.06 percent as of the end of October, gaining 0.2 percentage point from the end of last year, according to the FSS.

South Korea has stepped up efforts to rein in private sector loans alongside concerns that sluggish economic growth may forestall repayment of outstanding debts.

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