The number of private moneylenders operating in South Korea fell 6.9 percent in the second half of last year amid tighter business rules and a long streak of low rates, the financial watchdog said Friday.

The number of registered private moneylenders and brokers reached 10,895 as of end-2012, compared with 11,702 six months earlier, according to the Financial Services Commission.

The fall in such lenders came as the government has toughened rules on the ceiling on interest rates that such money lenders can charge on borrowers and overall market rates have been on the decline amid the central bank’s easy cycle.

Korea brought down the interest rate ceiling twice over the last two years to the current 39 percent from 49 percent in July 2010 in a bid to curb excessive lending against possible defaults.

Credit lending rates charged by such money lenders stood at 35.4 percent as of end-2012, down from 36.4 percent at the end of June 2012, according to the FSC.

The reading stood in contrast with local banks’ average lending rates of 4.84 percent as of the end of last year.

Borrowers with low credits tend to rely on such money lenders, enduring higher lending rates as they are denied of bank loans due to their low creditworthiness.

The outstanding amount of loans extended by money lenders totaled 8.69 trillion won ($7.81 billion) as of end-2012, up 2.6 percent from six months earlier, the FSC said. (Yonhap News)