Financial Authorities "No Review Conducted on Jeonse Loan Regulations"

[Asia Economy Reporter Jin-ho Kim] Despite financial authorities exerting strong pressure on all loans to curb the rising household debt, which has surpassed 1,800 trillion won, jeonse loans are expected to be excluded from regulation.

According to the financial sector on the 8th, the Financial Services Commission stated in a press release the day before, "There are no plans to consider measures such as requiring funding plans to strengthen regulations on jeonse loans."

The financial authorities' decision to exclude jeonse loans from regulation stems from concerns that vulnerable groups and low-income real demand borrowers would face difficulties. Most users of jeonse loans are actual demand borrowers. Additionally, even if jeonse loans are used for other purposes, verification is difficult, making loan regulation practically impossible, which also seems to have influenced the decision.

Meanwhile, the household loan balance of the five major banks?KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup?stood at 698.8149 trillion won as of the end of last month, up 4.1% (28.661 trillion won) from the end of last year (670.1539 trillion won). Among these, mortgage loans increased by 19.6299 trillion won, accounting for 68.4% of the total household loan increase. In particular, jeonse loans rose by 14.7543 trillion won, exceeding half (51.4%) of the total increase.

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