Debt among self-employed reaches 520 trillion won

Debt incurred by self-employed businesses in Korea reached 520 trillion won ($456.7 billion) as of late 2016, official data showed Sunday.

The Financial Supervisory Service said data provided by Nice Information Service revealed that debt by those who run their own businesses surged 60 trillion won in one year. In late 2015, debt by the business owners stood at 460 trillion won.

“In effect each of the 1.5 million business owners, on average was 350 million won in debt,” it said. The total includes both corporate and personal loans.

The FSS said that while indebtedness has risen there is no need for worry.

The financial regulator said the arrears rate for the loans is low, which means people are making money on investments they have made with borrowed money.

On the other hand, it said government officials are keeping tabs on small business taking out loans from the non-banking sector secondary financial firms that demand higher interest rates. This could pose future challenges and hurt the overall economy.

Yonhap