Loans to households continued to hit record levels in September led by borrowings for initial public offerings (IPOs) of stocks and property purchases.
Koreans in their 20s and 30s have taken out a total of 62 trillion won ($53 billion) in so-called minus bankbook loans in the three years , indicating that young people are seeking alternative ways to raise money for real estate and stock investment.
Assets of financial holding companies increased 7.4 percent in the first half compared to six months earlier as demand for loans rose, Financial Supervisory Service (FSS) data showed Tuesday.
Koreans are borrowing money more than ever.
According to Bank of Korea and Financial Services Commission data released Wednesday, loans taken out by households from commercial banks increased by 11.8 trillion won ($9.9 billion) in August, bringing the total outstanding to 948.2 trillion.
Unsecured lending — which involves the extending of credit to borrowers not pledging collateral — is increasing fast.
For the first time, mortgage loans offering an annual interest rate below 2 percent have surfaced two months after the Korean central bank dropped the nation’s key interest rates to a historic low in the face of the coronavirus pandemic.
K bank released on Monday a series of credit loan products after a year since the online bank halted its lending services due to the lack of capital.
Businesses in Korea are borrowing more than ever as they struggle with challenges related to the Covid-19 outbreak.
Small businesses can apply for special government-guaranteed loans from Monday in a second program organized to get credit into the hands of those facing Covid-19-related financial hardship, especially restaurants and convenience stores.