[Reporter’s Notebook] 2030 Generation’s All-In and Debt Investing Surge, but Regulations Target High-Income Earners?

'Joorini' and 'Boorini': The 2030 Generation at the Center
Easy Loans with Just a Tap of a Finger
Financial Authorities' Credit Loan Measures Target High-Income, High-Credit Borrowers
Concerns Rise Over Bank Soundness Due to Misguided Policies

[Asia Economy Reporter Park Sun-mi] The term "Joorini" (a combination of "ju" from stock and "orini" meaning child) and "Boorini" (a combination of "bu" from real estate and "orini") have emerged, likening millennial (ages 20-30) novice investors in stocks and real estate to children, reflecting the serious phenomenon of 2030 generation's "Yeongkkeul" (pulling together all their resources) and "Debt Investment" (borrowing to invest).

As the number of young people interested in investing has increased significantly, YouTube channels related to stocks and real estate have seen a surge in subscribers, and terrestrial TV channels have even introduced real estate entertainment programs. Statements openly encouraging "Buy stocks" and "Real estate prices have risen" are pouring out.

The environment has also been created where young people, who are highly skilled in using the internet, find it easier to borrow money for investment.

At the same time, with the spread of the novel coronavirus infection (COVID-19) and the rise of non-face-to-face services, commercial banks have competed to launch mobile loan products that allow loans within minutes with just a tap of a finger. Internet-only banks, which need to grow their size, also wooed young customers by promoting lower interest rates and faster loans. Their loan methods are distinctly different from the older generation who used to call bank branches one by one to compare interest rates or visit branches for consultations.

The banking sector points to 'non-face-to-face credit loans' using mobile devices as the main reason for the sharp increase in unsecured loans since early this year. Since it is possible to check limits, interest rates, and even get loans in a one-stop process without visiting a branch, unsecured loans among young people proficient in mobile use have surged.

As of the end of August, Kakao Bank, whose main customers are young people, saw its unsecured loan balance increase by 16% compared to the beginning of the year. The mobile unsecured loans for the 2030 generation at the four major banks have increased by more than 5 trillion won this year. This shows how easily the 2030 generation, for whom mobile use is "a piece of cake," are making finger loans.

On the other hand, the financial authorities' prescription for the surge in unsecured loans seems to be heading in a completely different direction. The authorities have announced a "pinpoint regulation" targeting large unsecured loans by high-income, high-credit individuals. Unlike general unsecured loans, which are made within 100-150% of annual income, special occupations can borrow more than 200% of their annual income, which is seen as a problem, and the plan is to block their investment-purpose unsecured loans.

This means that rather than restricting the debt investment of the 2030 generation with lower debt repayment ability, the loans of high-income, high-credit individuals who have the ability to repay are being suppressed. To solve the problem, an accurate understanding of the actual situation is the first priority.

One should not be so afraid of maggots that they cannot make jang (fermented sauce). There is concern that misguided prescriptions might further deteriorate the soundness of banks that are focusing all their efforts on profitability management.

This content was produced with the assistance of AI translation services.