Self-Employed Borrowed Over 70 Trillion Won in First Half... Enduring COVID-19 with Debt

[Image source=Yonhap News]

[Asia Economy Reporter Eunbyeol Kim] It has been reported that self-employed individuals borrowed more than 70 trillion won in loans during the first half of this year to withstand the shock of the novel coronavirus disease (COVID-19). The loan amount growth rate in the first half of the year has already surpassed last year's growth rate, and the number of borrowers has increased the most in the past five years.

According to household debt database (DB) data received by Jang Hye-young, a member of the National Assembly's Planning and Finance Committee from the Justice Party, from the Bank of Korea on the 15th, the outstanding loan balance for self-employed individuals as of the end of June this year was 755.1 trillion won. This is an increase of 70.2 trillion won (10.25%) compared to the end of last year (684.9 trillion won). This growth rate exceeds last year's annual growth rate (9.71%).

As of the end of June, the number of self-employed borrowers was 2,296,000, an increase of 382,000 compared to the end of last year. This increase is more than double the increase of 144,000 in the past year and is the largest increase in the past five years.

The household debt DB is a statistic compiled by the Bank of Korea by collecting credit information of about 1 million people each quarter from the credit inquiry company NICE Information Service. The sharp increase in the number of self-employed borrowers and loan balances is attributed to the spread of COVID-19, which can be interpreted as self-employed individuals enduring the crisis through debt.

In particular, as the spread of COVID-19 has recently intensified again, it has become difficult for self-employed individuals to endure this winter as well.

Representative Jang emphasized, "It is urgent to prepare comprehensive measures that not only provide one-time cash payments such as the Small Business New Hope Fund organized through this year's supplementary budget but also support rent reductions due to business suspension and, if necessary, allow for the option of business closure."

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