Government data showed Wednesday that a total of 19.68 million South Koreans, or more than 38 percent of the country’s population, had outstanding household loans in the fourth quarter of last year, owing an average of 95.5 million won ($65,500) per person.
The average loan per person marked the highest figure since the government started tallying the figure in 2012, according to Bank of Korea data submitted to Rep. Park Seong-hoon of the ruling People Power Party. The figure includes individual borrowing such as credit loans and mortgage loans.
The per-capita loan amount increased for a sixth straight quarter since the 93.3 million won recorded in the second quarter of 2023, and up nearly 2 million won from the 93.67 million won in the fourth quarter of 2023.
"The continued increase in household loans is leading to a vicious cycle of less spending and a slump in domestic demand... The government and the financial authorities must come up with a comprehensive plan to ease the loan burden on underprivileged groups and reduce household loans," Park said.
The number of debtors decreased from 19.79 million in the fourth quarter of 2023, the smallest figure since 19.63 million in the fourth quarter of 2020. But the size of total debt rose from 1,853.3 trillion won to 1,880.4 trillion won between the final quarters of 2023 and 2024.
Those in their 40s owed the most, at an average of 110.7 million won, followed by 92 million won for 50-somethings. Those aged under 50 owed 74.3 million won, which was the highest-ever figure for this particular group, as was the figure for the 40-somethings.
The data also showed that a substantial amount of the borrowing was done through non-bank depository institutions, which are not subject to the Banking Act and generally have different rates than banks. The figure ranged from an average of 55.8 million won per person for the 60-and-older group to 39.7 million won for the under-40 group.
A total of 813,000 people were behind in paying back their loans, in arrears by a total of 31.3 trillion won. The latest news follows a March report that South Korea's household debt-to-gross domestic product in the fourth quarter of 2024 was 91.7 percent, second only to Canada (100.6 percent) among the 38 major countries surveyed in the report by the Institute of International Finance. The average global ratio was 60.3 percent.
minsikyoon@heraldcorp.com
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