Ordinary people’s default rate to increase…Bank risk to get bigger
Cho Eun Gook | ceg4204@ | 2017-11-20 10:15:59
It has been pointed out that the possibility of a bankruptcy is high as the delinquency rate of `Shinseonhang loans`, which is being implemented as part of the government`s plan to expand the people`s finances, is increasing. In particular, as the financial authorities have begun to expand loans to banks by issuing new loans, the balance of loans and the delinquency rate are also soaring this year. Initially, banks started from the policy aim of realizing small-sum financing through loans to banks, but it can be a boomerang that worsens the soundness of the financial sector as the delinquency rate expands.
According to data obtained through the National Assembly`s Jung Jae-ho (Democratic Party) office of the National Assembly on November 19, the balance and delinquency rate of loan products of Sae Hee Park has been surging this year.
It is the representative lender loan product that was created during the Lee Myung Bak administration in 2010, and the credit rating is below grade 5 and annual income is below KRW 40 million. Regardless of the credit rating, the applicant is eligible to apply for an annual income of 30 million won or less. These low-lenders are normally difficult to receive credit loans from institutionalized banks, but commercial banks have been providing funds to support the public finances.
The problem, on the other hand, is that since the new government has increased the loan balance, the delinquency rate has also skyrocketed. The balance of the loan from Sae Hee Park has risen from KRW 3.829 trillion in 2015 to KRW 4 trillion 249.8 billion last year, which has increased by KRW 420.2 billion. However, it surpassed KRW 4,925.8 billion as of September this year and increased by 676 billion won from the previous year. In particular, considering the fact that loans are concentrated at the end of the year, cumulative loans are expected to soar to the mid-5 trillion won level by the end of this year. The growth rate was 10.98 percent in the previous year, but it increased by 15.91 percent compared to the net increase in the previous nine months.
As the loan amount increases in a short period of time, the risk increases with time. The delinquency rate of the loan was 2.24 % last year, but it rose to 2.30 % this year. The delinquency ratio is six times higher than general personal credit, which typically represents a 0.40% delinquency rate.
The number of new borrowers also surged recently. The total number of borrowers increased from 168,701 in 2015 to 195,254 last year, and this year it was 16,1693 by September this year. According to the current trend, the possibility of exceeding 200,000 by the end of the year is also noted. Especially, considering the average monthly number of borrowers, the growth rate is gradually accelerating to 10, 4058 in 2015, 16,445 in 2016 and 17,966 in the year.
Meanwhile, in the financial sector, especially since the current government was launched, the financial strength of the financial authorities to expand the lending of Sae Hee-park has increased, causing concerns over the delinquency rate as well as the size of the loan. The banking authority explained that the financial authorities` tightening of lending pressure is actually leading to deterioration in the credit quality of each bank. Actual financial institutions are constantly reporting on the status of low-lending consumer lending products, and demand banks to expand earnings for those banks that are not performing well. Actually, the deputy director of one of the commercial banks` goddesses is said to have received a call on the financial system because of the poor performance of the lender.
In the financial sector, the financial authorities should re-examine the lending qualifications and risks in preparation for the possibility of insolvency of commercial lending products, rather than unilaterally pressurizing commercial banks with the purpose of expanding public finance.
A high-ranking official of a commercial bank said, "We check the current status of loans on a daily basis in relation to the loans for Sihongang Hall and financial support for SMEs." "The expansion of the people`s finances is good, but the government is looking into the unstable sectors. I have to see it. "Especially, an official of the banking sector said, "The recent financial policy of the government is embracing the financial system, which is why the banks have made a lot of money and should solve it." The government is trying to increase the support of the people`s financial policies and it should be prepared. "
By Kim Dong Wook & Cho Eun Gook ceg4204@
[ copyright ⓒ The Digitaltimes ]
According to data obtained through the National Assembly`s Jung Jae-ho (Democratic Party) office of the National Assembly on November 19, the balance and delinquency rate of loan products of Sae Hee Park has been surging this year.
It is the representative lender loan product that was created during the Lee Myung Bak administration in 2010, and the credit rating is below grade 5 and annual income is below KRW 40 million. Regardless of the credit rating, the applicant is eligible to apply for an annual income of 30 million won or less. These low-lenders are normally difficult to receive credit loans from institutionalized banks, but commercial banks have been providing funds to support the public finances.
The problem, on the other hand, is that since the new government has increased the loan balance, the delinquency rate has also skyrocketed. The balance of the loan from Sae Hee Park has risen from KRW 3.829 trillion in 2015 to KRW 4 trillion 249.8 billion last year, which has increased by KRW 420.2 billion. However, it surpassed KRW 4,925.8 billion as of September this year and increased by 676 billion won from the previous year. In particular, considering the fact that loans are concentrated at the end of the year, cumulative loans are expected to soar to the mid-5 trillion won level by the end of this year. The growth rate was 10.98 percent in the previous year, but it increased by 15.91 percent compared to the net increase in the previous nine months.
As the loan amount increases in a short period of time, the risk increases with time. The delinquency rate of the loan was 2.24 % last year, but it rose to 2.30 % this year. The delinquency ratio is six times higher than general personal credit, which typically represents a 0.40% delinquency rate.
The number of new borrowers also surged recently. The total number of borrowers increased from 168,701 in 2015 to 195,254 last year, and this year it was 16,1693 by September this year. According to the current trend, the possibility of exceeding 200,000 by the end of the year is also noted. Especially, considering the average monthly number of borrowers, the growth rate is gradually accelerating to 10, 4058 in 2015, 16,445 in 2016 and 17,966 in the year.
Meanwhile, in the financial sector, especially since the current government was launched, the financial strength of the financial authorities to expand the lending of Sae Hee-park has increased, causing concerns over the delinquency rate as well as the size of the loan. The banking authority explained that the financial authorities` tightening of lending pressure is actually leading to deterioration in the credit quality of each bank. Actual financial institutions are constantly reporting on the status of low-lending consumer lending products, and demand banks to expand earnings for those banks that are not performing well. Actually, the deputy director of one of the commercial banks` goddesses is said to have received a call on the financial system because of the poor performance of the lender.
In the financial sector, the financial authorities should re-examine the lending qualifications and risks in preparation for the possibility of insolvency of commercial lending products, rather than unilaterally pressurizing commercial banks with the purpose of expanding public finance.
A high-ranking official of a commercial bank said, "We check the current status of loans on a daily basis in relation to the loans for Sihongang Hall and financial support for SMEs." "The expansion of the people`s finances is good, but the government is looking into the unstable sectors. I have to see it. "Especially, an official of the banking sector said, "The recent financial policy of the government is embracing the financial system, which is why the banks have made a lot of money and should solve it." The government is trying to increase the support of the people`s financial policies and it should be prepared. "
By Kim Dong Wook & Cho Eun Gook ceg4204@