The number of licensed money lenders in South Korea has halved in the last five years, largely due to worsening business conditions, industry data showed Thursday.

The number of money lenders registered with municipalities reached 9,170 as of last Friday, down 49.6 percent from 18,500 tallied in 2007, according to the data by the Consumer Loan Finance Association.

The sharp decline came as local money lenders have been facing difficulties in running their businesses as the financial authorities have tightened lending rules including lowering interest rates and raising taxes as part of an effort to stem excessive lending.

Market watchers suspect a lot of them have moved their business to the underground loan market, raising concern it could lead those borrowers with low credit to seek out loan sharks.

Meanwhile, large licensed money lenders have underperformed, with No. 1 player Rush N Cash’s total assets shrinking 27 percent to 1.66 trillion won last year from a year earlier. (Yonhap News)