Number of Loan Business Users Decreased by 56,000 in the First Half of This Year

Decrease in Unsecured Loan Ratio and Increase in Secured Loans

On the 29th, as the COVID-19 pandemic continues unabated, illegal loan business card-type flyers from private loan companies are scattered across the Insadong street in Jongno-gu, Seoul. Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Kwon Hyun-ji] As the loan threshold for low-credit borrowers has risen, the number of users of the loan business has significantly decreased this year. According to the "2022 First Half Loan Business Survey Results" announced by the Financial Supervisory Service on the 28th, the number of loan business borrowers as of the end of June was 1,064,000, down 56,000 from the end of last year. If the current trend of loan contraction in the loan industry continues, the year-end figure is expected to decline further.

Among all loan business loans, the proportion of unsecured loans also decreased. As of June this year, out of the total loan business loan balance of 15.8764 trillion KRW, unsecured loans accounted for 7.3276 trillion KRW, or 46.2%. On the other hand, the size of secured loans was 8.5488 trillion KRW (53.8%), an increase of 1.9 percentage points compared to one year ago. The decrease in unsecured loans and increase in secured loans means that loans to low-credit borrowers without collateral have decreased. The Financial Supervisory Service explained, "Although the loan balance growth trend expanded, the balance increased mainly in secured loans rather than unsecured loans, and the number of loan business users continued to decline."

Due to the increased proportion of secured loans, the loan balance per loan business user rose to 14.92 million KRW, up from 13.08 million KRW in the second half of last year. Additionally, the average loan interest rate in the loan business was recorded at 14.0%, down 0.7 percentage points from the second half of last year, and the delinquency rate of large loan businesses was 6.0% as of the end of June, down 0.1 percentage points from the second half of last year.

The performance of loan brokerage businesses also declined. The number of brokerage cases in the first half of this year was 241,000, down 6.9% compared to the second half of last year.

On the 29th, as the COVID-19 pandemic continues unabated, illegal loan business card-type flyers from private loan companies are scattered across the Insadong street in Jongno-gu, Seoul. Photo by Mun Ho-nam munonam@

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