"Debt Rollover" Multi-Debtors Reach 4.5 Million... Concerns Over Loan Defaults

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[Asia Economy Reporter Bu Aeri] It has been revealed that there are 4.5 million multi-debtors who have borrowed money from three or more financial institutions. The number of multi-debtors among the youth and elderly has sharply increased.

According to the 'Status of Multi-Debtors by Age' data received by Jin Sun-mi, a member of the National Assembly's Planning and Finance Committee from the Financial Supervisory Service, as of the end of June, the total number of multi-debtors was 4,509,000. The total debt they owe amounted to 598.3345 trillion won.

The number of multi-debtors has rapidly increased over the past three years.

At the end of December 2021, the number of multi-debtors was 4,502,000, which is a 6.1% increase compared to 4,244,000 at the end of December 2018. In particular, the number of multi-debtors among the youth and elderly surged. The youth group increased by 22.7%, and the elderly by 29.4%.

The proportion of multi-debtors among all debtors has also steadily increased. The share of multi-debtors, which was 22% at the end of December 2019, rose to 22.6% at the end of last year after two years. During the same period, the proportion of multi-debtors among the youth soared from 13.3% to 15.6%, and this increasing trend continued into this year, reaching 16.4% as of the end of June.

Loan amounts have also increased. As of the end of June this year, the total debt of multi-debtors was 598.3345 trillion won, meaning that each multi-debtor owes an average of 132.69 million won.

The age group with the highest per capita debt was those in their 40s. Each multi-debtor in their 40s borrowed an average of 146.25 million won. The next highest debt amount was among those in their 50s, with an average of 140.68 million won per person.

Multi-debtors often roll over debt with more debt, so the recent sharp interest rate hikes have increased repayment burdens, which could lead to rising delinquency rates. For this reason, multi-debtors are identified as the 'weak link' in our economy.

Representative Jin said, "With inflation and interest rate hikes overlapping, there is a risk of loan defaults centered on multi-debtors," adding, "Since this could spread to a crisis throughout our economy, risk management measures such as debt adjustment and refinancing loans for vulnerable borrowers, including youth and the elderly, should be considered."

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