Loan Interest Rate at Single Digit Level
The average interest rate of loans for small and medium-sized businesses reached the single digit level for the first time.According to nine major banks on March 17, the new average interest rate marked 9.9 percent.
It was over 16 percent in June 1998 and 10.5 percent in January 1999.
The average interest rate for big business groups or chaebol last month was 10.9 percent.
The reasons for the lowered interest rate are that the Bank of Korea(BOK) lowered its rate to commercial banks from 5 to 3 percent in September 1998, and banks are competing to induce good borrowers with low rates.
The ammount of loans for small and mid-sized companies had long been declining since the economic crisis, but has been returning back on track this year.
Hwashik Bong
with the Korea JoongAng Daily
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