In the first half of this year, reports and consultations related to illegal private loan damage received by financial authorities neared 10,000. This figure accounts for 60% of last year's annual total, recorded in just the first half of the year. This is interpreted as a result of reduced demand for legal loans due to the deterioration of soundness in the second financial sector.
According to data submitted by the Financial Supervisory Service to People Power Party lawmaker Yoon Han-hong on the 17th, the number of reports and consultations related to illegal private loan damage in the first half of this year was 9,842. This is 63% of last year's total annual reports and consultations (15,397). Recently, reports and consultations regarding illegal private loan damage have been steadily increasing. In 2020, there were only 8,043 cases, but after surpassing 10,000 in 2022, it increased to 15,397 last year.
By item, the number of reports against unregistered lending companies was the highest at 4,974. This was followed by debt collection (2,478), high interest rates (925), illegal advertising (637), illegal fees (451), and similar solicitation (377).
It appears that the reduction of new loans in the second financial sector has led some low-credit borrowers to resort to illegal private loans. According to the Bank of Korea, as of May, the total loans of savings banks stood at 95.7067 trillion won, while Saemaul Geumgo's loans reached 182.2252 trillion won. Compared to January, this represents a decrease of 1.1% and 0.4%, respectively. At the end of June, the credit loan balance of nine card companies (Lotte, BC, Samsung, Shinhan, Woori, Hana, Hyundai, KB Kookmin, NH Nonghyup Card) was recorded at 42.5148 trillion won, a 0.5% decrease compared to January (42.7310 trillion won).
The second financial sector is unable to increase its lending volume as the delinquency rate rises due to deteriorating soundness. According to the Korea Savings Bank Federation, the delinquency rate for 79 savings banks nationwide in the first quarter was 9%, up 0.48 percentage points from the end of last year (8.52%), marking the highest level in 10 years. The average actual delinquency rate for eight major card companies (Samsung, Shinhan, Hyundai, KB Kookmin, Hana, Woori, BC Card) in the first quarter was 1.93%, up 0.13 percentage points from the previous quarter (1.80%). Last year, the overall delinquency rate for Saemaul Geumgo also rose to 6.81%, an increase of 1.74 percentage points from the previous year.
The financial sector reports that this trend is expected to continue in the second half of the year. This is because the government announced on June 27 a stringent household loan management plan which includes limiting credit loan amounts to within annual income. Products related to credit loans in the second financial sector, including card loans, are also subject to management.
A representative from the financial sector noted, "Rather than uniformly regulating the supply of loans, it would be preferable to grant practical staff the option to adjust interest rates by loan product. We must prevent users from being pushed into illegal private loans."