Self-Employed Borrowers Average 170 Million KRW in Loans... Debt and Delinquency Rates Rising
2019 Job Administration Statistics: Individual Business Owners (Companies) Debt
[Sejong=Asia Economy Reporter Son Seon-hee] It has been revealed that domestic self-employed individuals (sole proprietors) have increased their debt but failed to repay it on time, leading to a rise in delinquency rates. In particular, the delinquency rate was higher among small-scale business owners with lower sales volumes.
According to the '2019 Job Administration Statistics on Sole Proprietors (Enterprises) Debt' released by Statistics Korea on the 29th, the average loan amount for sole proprietors was 171.65 million KRW (as of the end of December 2019), an increase of 3.1% (5.15 million KRW) compared to the previous year. The median loan amount for sole proprietors with outstanding loans was 89.88 million KRW, up 5.7% (4.87 million KRW) during the same period.
The delinquency rate based on the outstanding loan balance of sole proprietors was 0.40%, up 0.07 percentage points from a year earlier. While the delinquency rate in the banking sector was 0.15%, not significantly different from 0.14% a year ago, the delinquency rate for loans through non-bank sectors sharply increased from 0.66% to 0.84%.
Looking at the delinquency rates by company size, overall rates increased, with the delinquency rate for small-scale businesses with annual sales under 30 million KRW reaching 0.73%, markedly higher than others. This indicates that smaller businesses with lower sales are more likely to default on their debts. As sales volume increases, the delinquency rate tends to decrease, with companies having sales over 1 billion KRW showing the lowest delinquency rate at 0.18%.
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By industry, the average loan amount was highest in health and social welfare at 508.64 million KRW, followed by agriculture, forestry, and fisheries at 292.82 million KRW, real estate at 285.27 million KRW, and manufacturing at 238.17 million KRW. The delinquency rate was highest in construction at 0.78%, followed by business facility management and rental services at 0.63%, and professional, scientific, and technical services at 0.48%.
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