Lee Jae-myung "Entering Household Debt Crisis Phase"... Opposition Party to Support Debtor Counseling

"Government Shows No Response, Emergency Budget Needed"
Experts Point Out "Financial Crisis Stage"

Lee Jae-myung, leader of the Democratic Party of Korea, pointed out the household debt crisis, saying, "(The government authorities) have not presented any realistic alternatives at all." The Democratic Party once again urged the government to prepare a supplementary budget to resolve the debt issue.

On the morning of the 13th, the Democratic Party set up the 'Minsheng Debt Hope Plus Counseling Center' at the party's central office and held a meeting to diagnose the debt crisis issue with experts. The center was headed by Democratic Party lawmaker Yoon Young-duk and former Democratic Party lawmaker Je Yoon-kyung.

On the day, Lee said, "The number of households making extreme choices due to debt problems is increasing, and in the future, due to various issues such as delinquency rates, the household debt problem seems likely to severely squeeze the lives of ordinary people," adding, "The household debt problem is already at a crisis stage."

He continued, "It is said that nearly 3 million people currently find it difficult to make a living after repaying their debts," and "Loans to vulnerable groups have increased by 1.2 trillion won within a year," he criticized. He also said, "The delinquency rate of savings banks in the secondary financial sector has exceeded 5%," and "The delinquency rate of loan companies is 11%, which is a really serious situation."

[Image source=Yonhap News]

He reiterated the necessity of a supplementary budget. Lee said, "One of the core contents of the livelihood supplementary budget proposal is measures to address the debt problem," and "The government is showing no response, but considering the risks on the ground and the explosiveness of the debt problem, I once again urge the government and ruling party to promptly engage in supplementary budget negotiations."

Professor Lee Sang-bok of Sogang University Law School, who attended as a financial expert that day, pointed out, "Recently, delinquency rates have risen, interest burdens have become difficult, and we have entered the stage of a financial crisis," adding, "Currently, the real estate PF problem is serious. All financial institutions such as banks and securities companies are facing expanding problems in lending."

He continued, "Even Saemaeul Geumgo has started a bank run; has it really calmed down?" and diagnosed, "I think the government should also implement concrete countermeasures."

Former lawmaker Je, who co-headed the counseling center, explained, "Looking at the trend of bank delinquency rates, they rise at the end of each quarter and then fall again at the start of a new quarter," adding, "This is not because multiple debtors have repaid their debts and resolved them, but because the government artificially writes off bad debts to exclude them."

He urged, "The government should stop artificially hiding and manipulating delinquency rates and household insolvency through deregulation."

In response, Han Jong-gwan, chairman of the Jeonbuk Credit Guarantee Foundation, proposed alternatives including ▲extension of maturity and repayment deferral measures for loans to self-employed and small business owners ▲active consideration of lowering the Bank of Korea’s base interest rate ▲additional support of 1.8 trillion won for self-employed and small business owners.

The Democratic Party plans to operate the counseling center to provide customized debt adjustment guidance and professional counselor training for small business owners who have suffered from illegal debt damage. They also intend to build a cooperative system by collaborating with civic groups such as the National Financial Consumer Network and local organizations nationwide.

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