Proportion of Multiple Debtors Hits 'Highest'... Increase Among Under 30s and Low-to-Middle Income Groups

22.4% of Multiple Debtors with Loans from 3 or More Places, 4.46 Million People

[Asia Economy Reporter Seo So-jeong] Although household loans have been gradually decreasing since the end of last year, the proportion of multiple debtors who have borrowed from three or more financial institutions has actually increased. Currently, there are about 4.46 million multiple debtors, with the proportion of multiple debtors among those aged 30 and under, as well as middle- and low-income groups, rising, prompting warnings that countermeasures are needed.

According to data submitted by the Bank of Korea to Yoon Chang-hyun, a member of the National Assembly's Political Affairs Committee from the People Power Party, as of the end of the first quarter of this year, 22.4% of household loan borrowers were multiple debtors, an increase of 0.3 percentage points from the end of last year. This is the highest record since data collection began in 2012.

Since the estimation of the total number of household loan borrowers based on the first quarter household debt DB sample data is not yet complete, applying this proportion (22.4%) to the total number of borrowers as of the end of last year (19,894,000) results in approximately 4,456,000 multiple debtors. Based on loan balance rather than the number of borrowers, the proportion of multiple debt is 31.9%.

Looking at the proportion of multiple debtors by financial sector, savings banks showed 76.8% based on loan balance and 69.0% based on the number of borrowers at the end of the first quarter. These figures represent increases of 0.9 percentage points and 1.5 percentage points respectively compared to the end of last year. The proportion of multiple debtors in banks was recorded at 27.6% based on loan balance and 25.4% based on borrowers at the end of the first quarter.

Breaking down the total debt of multiple debtors by age group in the first quarter, those in their 40s accounted for the largest share at 32.6%, followed by those in their 50s at 28.0%, those aged 30 and under at 26.8%, and those aged 60 and above at 12.6%. While the share of those in their 40s decreased by 1.1 percentage points compared to the end of last year, the shares of those aged 30 and under and those in their 50s increased by 0.6 percentage points and 0.2 percentage points respectively.

When dividing the loan balances of multiple debtors by the borrower's income level, high-income earners (top 30% income bracket) accounted for 65.6%, while middle-income earners (30?70% income bracket) and low-income earners (bottom 30%) accounted for 25.0% and 9.4% respectively. Compared to the end of last year, the share of high-income earners decreased by 0.3 percentage points, while those of middle- and low-income earners increased by 0.2 percentage points and 0.1 percentage points respectively.

Representative Yoon said, "The number of self-employed, young people, and low-income groups struggling with multiple debts is increasing," adding, "If left unchecked, this could become a cause of a financial crisis, so the government should focus its policies on restructuring high-interest loans for vulnerable borrowers."

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