Rising Real Estate Slump Pushes On-tu Industry Delinquency Rate Up 2%p in Two Months

Late Last Year 4.67% → This February 7.85%
Rapid Increase in Real Estate Secured Loan Delinquency Rate

As the real estate market downturn prolongs, the delinquency rate in the online investment-linked finance industry (Ontu-eop), which has many real estate-related loans, has increased by more than 2 percentage points in two months.

According to the Ontu-eop industry on the 9th, the overall average delinquency rate of Ontu-eop as of the end of February was 7.85%, up 2.18 percentage points from 4.67% at the end of last year. It has steadily risen from 3.02% in June last year, 3.49% in September, 4.67% in December, and 6.77% in January this year, with the rate of increase accelerating since the beginning of this year.

Ontu-eop is a service that attracts funds from investors through an online platform and connects them to those in need of loans. It was formerly called 'P2P (Peer-to-Peer) finance.' It entered the regulatory framework with the enforcement of the Ontu-eop Act in August 2020.

Some companies have even exceeded the regulatory disclosure standard delinquency rate of 15%. According to each company's disclosure, as of February, Daon Fintech's delinquency rate was 28.15%, Oasis Fund's delinquency rate was 18.13%. The delinquency rate of Together Funding (Together Apps), the second largest in the industry by loan balance, also rose to 17.01%.

The rising delinquency rate in Ontu-eop is due to the continued real estate market downturn since last year. Because the Ontu-eop industry has maintained a high proportion of real estate-related loans, the delinquency rate has also surged as the real estate market faces a recession. The delinquency rate for real estate-secured loans in Ontu-eop was 8.75% in February, approaching double digits. Compared to the end of the first half of last year (1.87%), it has increased by nearly 7 percentage points.

According to the P2P Center, the central record management institution for Ontu-eop, the proportion of real estate-related loans in the total loan balance of 49 registered companies during the period was 73% (including real estate project financing and real estate-secured loans). Although this is slightly lower than the 77% reached in the first half of last year, it still accounts for the highest proportion.

The delinquency rate for loans other than real estate assets is in the 1% range. In February, personal credit loans recorded 1.96%, and promissory note and accounts receivable secured loans recorded 1.19%. These products accounted for 13% and 8% of the total loan balance in Ontu-eop, respectively.

[Image source=Yonhap News]

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