Weak lender to reach 1.5 million…Household loan management in ‘emergency’
Kwon Dae Gyung | kwon213@ | 2018-03-30 11:19:20
Over the past year, over 1.5 million households have been financially vulnerable to pay 40 % of their income. The total debt of the vulnerable borrower is KRW 82.7 trillion, which is KRW 4.20 trillion more than the previous year. The loan amount of low-income and low-income borrowers is also increased by KRW 500 billion won to the household debt management.
According to the financial stability report of the Financial Supervisory Commission of the Monetary Policy Committee of the Bank of Korea on March 29, the total household debt of last year was KRW 1,450.9 trillion.
This is an even higher figure than the average growth rate of 5.8% in 2014 from the previous year. In particular, borrowing money from three or more financial institutions led to low interest loans (grades 7 to 10) and low-income borrowers (low 30 percent) to 1499,000. The total household loan-to-borrower accounted for 8.0 percent of the total, up 33,000 from the previous year.
Especially, the Bank of Korea warned that the interest rate burden will increase markedly with vulnerable borrowers in the face of growing interest rate pressures. As a matter of fact, the loan volume of low-income and low-income borrowers, which are multi-debtors, increased by KRW 50 billion from KRW 12.7 trillion (0.9% of total).
The problem is that if the lending rate is raised, the repayment burden of these vulnerable borrowers will double. If the actual lending rate rises by 1 % point, the total debt-to-equity ratio (DSR) of the entire borrower will increase from 9.5% to 10.9%, and the interest-bearing DSR will increase from 24.4% to 26.1%. Besides, once 2 % point increase, the interest rate of all borrowers` interest DSR is increased by 12.3% and that of vulnerable borrowers is increased by 27.8%.
"As the number of borrowers and the size of their debts increase, the debt burden of these borrowers will increase if the interest rate rises to a lending rate," an official of the Bank of Korea said. By industry, the real estate and construction industries were the most serious, and 20.4% (835) of the companies subject to external audit were marginal. One out of five is a "zombie enterprise."
Economic experts also expressed concern. Kim Ki-heung, a professor of economics at Gyeonggi University, said, "As the interest rate hike in the US increases, the possibility of Korea`s interest rate hike is growing, making it more difficult for financiers to repay their money." The government has made unusual efforts It seems necessary. " In addition, the BOK said that the number of marginal companies that failed to repay interest due to operating profit reached 3126 last year. Of these companies, 68.8% (2152 firms) were unable to take the continuous business mark for more than two years, and 23.4% (504 companies) were in the marginal enterprise even for 7 years.
By Kwon Dae Gyung kwon213@
[ copyright ⓒ The Digitaltimes ]
According to the financial stability report of the Financial Supervisory Commission of the Monetary Policy Committee of the Bank of Korea on March 29, the total household debt of last year was KRW 1,450.9 trillion.
This is an even higher figure than the average growth rate of 5.8% in 2014 from the previous year. In particular, borrowing money from three or more financial institutions led to low interest loans (grades 7 to 10) and low-income borrowers (low 30 percent) to 1499,000. The total household loan-to-borrower accounted for 8.0 percent of the total, up 33,000 from the previous year.
Especially, the Bank of Korea warned that the interest rate burden will increase markedly with vulnerable borrowers in the face of growing interest rate pressures. As a matter of fact, the loan volume of low-income and low-income borrowers, which are multi-debtors, increased by KRW 50 billion from KRW 12.7 trillion (0.9% of total).
The problem is that if the lending rate is raised, the repayment burden of these vulnerable borrowers will double. If the actual lending rate rises by 1 % point, the total debt-to-equity ratio (DSR) of the entire borrower will increase from 9.5% to 10.9%, and the interest-bearing DSR will increase from 24.4% to 26.1%. Besides, once 2 % point increase, the interest rate of all borrowers` interest DSR is increased by 12.3% and that of vulnerable borrowers is increased by 27.8%.
"As the number of borrowers and the size of their debts increase, the debt burden of these borrowers will increase if the interest rate rises to a lending rate," an official of the Bank of Korea said. By industry, the real estate and construction industries were the most serious, and 20.4% (835) of the companies subject to external audit were marginal. One out of five is a "zombie enterprise."
Economic experts also expressed concern. Kim Ki-heung, a professor of economics at Gyeonggi University, said, "As the interest rate hike in the US increases, the possibility of Korea`s interest rate hike is growing, making it more difficult for financiers to repay their money." The government has made unusual efforts It seems necessary. " In addition, the BOK said that the number of marginal companies that failed to repay interest due to operating profit reached 3126 last year. Of these companies, 68.8% (2152 firms) were unable to take the continuous business mark for more than two years, and 23.4% (504 companies) were in the marginal enterprise even for 7 years.
By Kwon Dae Gyung kwon213@