Amid the Yeolkkul and Bit-tu Craze, Major Banks See Sharp Decline in Mid-Interest Loans Over 3 Years

Jin Sun-mi, Democratic Party of Korea Lawmaker
"Consistently Decreasing Since 2018"

[Image source=Yonhap News]

[Asia Economy Reporter Kiho Sung] It has been revealed that mid-interest rate loans from commercial banks have significantly decreased.

Jin Sun-mi, a member of the National Assembly's Political Affairs Committee from the Democratic Party of Korea, announced on the 5th that an analysis of the total supply amount of 'mid-interest rate loans' according to the Financial Supervisory Service regulations showed that over the past three years from 2018 to last year, the amount of mid-interest rate loans handled by the five major banks (KB Kookmin, Shinhan, Woori, Hana, NH Nonghyup) decreased by 175.2 billion KRW (about 42%).

The total amount of mid-interest rate loans handled by the five major banks dropped from 413 billion KRW in 2018 to 267.5 billion KRW in 2019, nearly halving, and further decreased to 237.9 billion KRW last year.

Looking at the decrease in mid-interest rate loans by bank, Shinhan Bank had the largest drop of 114.8 billion KRW (53%), followed by Hana Bank with 68.1 billion KRW (55%), Kookmin Bank with 43.3 billion KRW (76%), and Nonghyup Bank with 18.4 billion KRW (93%).

On the other hand, data from the Financial Services Commission showed the opposite result. According to the FSC, mid-interest rate loans from all banks slightly increased from 7.1 trillion KRW in 2016 to 7.6 trillion KRW in 2018, and 7.7 trillion KRW in 2018. In 2019, it rose by more than 1 trillion KRW compared to the previous year to 8.9 trillion KRW, and expanded to 9.8 trillion KRW last year.

Representative Jin said, "If mid-interest rate loans expand, the interest burden on middle-credit borrowers will be reduced, and it will provide an additional opportunity for those who have already taken out loans at high interest rates to switch to lower rates," adding, "I hope that large banks will fulfill their social responsibilities rather than being preoccupied with risk management."

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