Average total borrowing increases 7.4 percent

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Average total borrowing increases 7.4 percent


A study released by Statistics Korea Monday found that the average size of the loans taken out by paid workers in Korea amounted to 40.76 million won ($33,500) in 2018, a 7.4 percent increase over 2017.

The figure does not include people that are self-employed or are paid on a day-to-day basis.

The late payment ratio on loans borrowed from banks and nonbanking financial institutions like savings bank cooperatives also increased by 0.05 percentage points over the same period to 0.56 percent.

The study has found that the people that borrowed the most were those in their 40s working at conglomerates with relatively higher salaries. The purpose of the loans is believed to be mostly for purchasing housing. Younger lenders, however, are more likely to be borrowing for other reasons such as paying off their student loans.

By gender, the average loan borrowed by men amounted to 51.38 million won, which is 87 percent larger than the average 27.47 million won borrowed from women.

The overdue payment ratio of men was also higher, at 0.61 percent, while form women it was at 0.44 percent.

By age, those in their 40s had the largest accumulated loans. On average, people in their 40s borrowed 59.58 million won followed by people in their 30s with 53.01 million won. The average loan borrowed by people in their 50s amounted to 49.81 million won, those in their 60s to 32.52 million won and those aged 70 or older, 14.5 million won.

Young people in their 20s or younger had the smallest accumulated loans, at 10.93 million won.

People who made more than 100 million won a year had borrowed an average 140.66 million won. Those that made between 70 million won and 100 million won on average had borrowed 99.43 million won. But those that made between 30 million and 50 million won a year borrowed an average 46.33 million won while those that made less than 30 million won borrowed 26 million won on average.

However, the more the person made, the lower their overdue payments were.

The late payment ratio of those that made more than 100 million won a year was only 0.11 percent. Those that made between 70 million won and 100 million won were at 0.15 percent, but that ratio rose to 0.35 percent for those that made between 30 million won and 50 million won and surged to 0.7 percent for those making 30 million won or less.

By workplace, people working at conglomerates had an average 65.15 million won in loans with a late payment ratio of 0.27 percent. Those that worked at SMEs averaged 31.9 million won, but had an overdue payment ratio of 0.88 percent.

Additionally, those that live in high-rise apartments borrowed an average 49.97 million won with a late payment ratio of 0.37 percent. Those that live in multiunit low-rise apartments had an average loan of 32.47 million won and those living in so-called officetels amounted to 30.22 million won. People living in houses borrowed 26.42 million won, but with an overdue rate of 1.12 percent.

The biggest concern, however, is the rapid rise of loans borrowed by younger people, especially from nonbanking financial institutions with higher interest rates.

The average amount of money borrowed by people in their 40s grew 5 percent while borrowing by those in their 30s was up 14.6 percent. Loans borrowed by people in their 60s actually fell 0.2 percent while those that are 70 or older saw a sharper drop of 3.5 percent. But the amount borrowed by people in their 20s or younger actually grew 56.3 percent.

The overdue ratio of loans borrowed from banks is only at 0.22 percent, while those borrowed from other financial institutions totals 1.15 percent.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]
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