Household loans extended by South Korean banks shrank for third straight month: report

High borrowing costs lowered demand.

Household loans extended by banks in South Korea shrank for the third consecutive month in March, reports Yonhap, based on data from the Bank of Korea (BOK).

High borrowing costs caused by the central bank’s monetary tightening caused demand to fall, the report said.

Outstanding household loans came at $790b (KRW1,049t) as of end-March, down KRW700b from February, BOK data showed.

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Home-backed loans rose KRW2.3t to KRW800.8t in March. Mortgage loans rose thanks to increased apartment transactions as well as the implementation of special loans aimed at helping people buy homes at a lower interest rate, said BOK.

Unsecured and other types of loans fell by KRW2.9t to KRW247.8t.