"Average Debt of 48.62 Million Won"... Office Workers 'Yeongkkeul' Amid Prolonged COVID-19 Pandemic

Statistics Korea, Survey on Wage Workers' Debt Scale as of the End of 2020

Last year, a small business owner is receiving a loan consultation at a commercial bank in Seoul.
Photo by Asia Economy

[Asia Economy Reporter Na Ye-eun] At the end of 2020, during the early spread of COVID-19, the average loan amount of office workers increased by more than 10% compared to the previous year, reaching 49 million KRW.

According to the 2020 wage worker debt scale survey by Statistics Korea on the 29th, as of December last year, the average loan amount of wage workers was 48.62 million KRW, an increase of 10.3% (4.54 million KRW) compared to 2019.

This is the largest increase since Statistics Korea began compiling related statistics in 2017. The average loan amount of wage workers was 39.74 million KRW in December 2017, 41.75 million KRW in 2018, and 44.08 million KRW in 2019, showing a growth rate in the 5% range before surging to double digits in 2020.

Non-housing secured loans such as jeonse loans and stock-collateralized loans, as well as unsecured loans, led the significant increase in loans. Non-housing secured loans increased by 15.8% (2.12 million KRW) from the previous year to 15.54 million KRW, and unsecured loans rose by 19.2% (1.99 million KRW) to 12.4 million KRW.

On the other hand, housing mortgage loans increased only by 1.6% (0.3 million KRW) compared to 2019, reaching 18.5 million KRW. This is interpreted as a significant rise in non-housing secured loans and unsecured loans due to the 'debt investment' (borrowing to invest) craze.

In particular, the increase in loans among those aged 29 and under, who raised investment funds through so-called 'Youngkkeul' (borrowing to the soul), was remarkable during the COVID-19 period. Loans for those aged 29 and under increased by 29.4% (3.33 million KRW) from the previous year to 14.66 million KRW, of which non-housing secured loans rose by 45.0% (2.25 million KRW) to 7.23 million KRW, and unsecured loans increased by 23.3% (0.8 million KRW) to 4.25 million KRW.

By industry, workers in the finance and insurance sector had the highest average loan amount at 95.41 million KRW, while loans in the accommodation and food service industry were the lowest at 18.98 million KRW.

Meanwhile, regarding the increase in loan amounts, a Statistics Korea official explained, "It appears that the increase in loans is due to a combination of factors such as the impact of COVID-19, low interest rates, and expanded investment demand due to a favorable stock market."

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