Young Generation's 'Debt Investment', 38 Trillion Won in the First Half of This Year Alone... 68% of Total New Loans by Securities Companies

Jang Hye-young, Justice Party member [Image source=Yonhap News]

[Sejong=Asia Economy Reporter Son Seonhee] It has been revealed that the amount borrowed from securities firms by young people in their teens to thirties for stock investment exceeded 38 trillion won in the first half of this year. This accounts for 68% of the total loan amount last year.

According to data submitted by the Financial Supervisory Service to Jang Hye-young, a member of the National Assembly's Planning and Finance Committee from the Justice Party, the total amount of new margin loans from securities firms from January to June was 185.8654 trillion won. Among these, the new loan amount by borrowers in their teens to thirties was 38.7453 trillion won, already reaching 67% of last year's total loan amount (57.0639 trillion won). As of the end of June, the new loan amount secured by young people's deposited securities was also 3.5 trillion won.

Among the 21.15 million newly opened securities accounts this year, about half (11.72 million) were held by this young generation.

The interest rate on securities firms' margin loans ranges from 4% to 8% depending on the loan period. The average interest rate on loans secured by deposited securities reaches 7% to 9%. Considering securities firms' transaction fees and securities transaction taxes, there are concerns that young people may fall into the trap of 'debt investment.' In particular, in the case of margin loans, if the stock price falls below the collateral ratio (about 140%), the securities firm can arbitrarily dispose of the stocks, resulting in confirmed losses.

Representative Jang said, "If young people, who have relatively lower income and assets compared to other generations, recklessly borrow money to invest in stocks, there is a risk that the instability of life itself will increase depending on fluctuations in the asset market."

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