Shoppers pass by vendors at the Mangwon Traditional Market in Mapo, Seoul, on March 17. (Jo He-rim/The Korea Herald)
The number of small business owners who were unable to repay credit loans prolonged an upward trend last year and remains likely to expand further this year, due to the novel coronavirus spread, data showed Sunday.
The number of small business owners who are in default came in at 35,806 in the fourth quarter last year, up from 35,567 in the third quarter and 33,292 in the second quarter, according to data compiled by credit rating firm NICE Credit Information Service.
Given that some 2.09 million small business owners took loans as of the fourth quarter, approximately 1 in 50 on average were observed to go delinquent.
Debt delinquents are those who fail to repay a loan of more than 500,000 won ($405) or two loans of 500,000 won or less for 90 days. Those who default on their loans are barred from credit transactions, and their personal properties could be subject to seizure.
“Under the current market conditions, there could be more bad loans down the road,” Lee In-ho, a professor at Seoul National University, was quoted as saying by Yonhap News Agency. “It is critical to keep those small businesses alive to prevent bigger problems.”
The number of households that fell behind on loan payments, on the other hand, dropped from 793,963 in the second quarter last year to 750,714 in the fourth quarter.
By Kim Young-won (email@example.com