The outstanding loan balance of domestic mid- to large-sized savings banks' unsecured loans fell by about 1.8 trillion won, but the number of borrowers and the delinquency rate instead increased. This trend was pronounced among people in their 50s and those 60 and older.
According to "Status of unsecured loans by age group at domestic mid- to large-sized savings banks (31 institutions), 2021–2025," submitted by the office of People Power Party lawmaker Yang-su Lee, a member of the National Policy Committee, to the Financial Supervisory Service on the 31st, the total outstanding loan balance of unsecured loans stood at 25.63 trillion won in the first quarter of this year. That was down 1.76 trillion won from a year earlier.
In contrast, the total number of borrowers was 2,074,000, up 88,000 over the same period. The average arrears rate also rose 0.54 percentage points to 6.93%. Among the 31 savings banks surveyed, 11 saw their outstanding loan balance for unsecured loans decline while their arrears rate rose.
The decline in the outstanding loan balance of unsecured loans is seen as the result of the "June 27 lending curbs" implemented last year, which limited unsecured loan limits to within annual income, and of savings banks moving to sell nonperforming loans. By contrast, with the economic slump increasing funding demand and weakening the repayment capacity of multiple-debt borrowers, the number of borrowers and the arrears rate increased.
By age group, unsecured loans increased mainly among people in their 50s and those 60 and older.
For people in their 50s, the outstanding loan balance was 5.94 trillion won and the number of borrowers was 347,000 at the end of 2021, but by the end of last year they had risen to 7.21 trillion won and 507,000, respectively. Over the same period, the arrears rate climbed from 4.46% to 6.66%. In the first quarter of this year, the outstanding loan balance edged down to 7.08 trillion won, but the number of borrowers increased to 513,000 and the arrears rate rose to 7.14%.
For those 60 and older, the outstanding loan balance also increased over the same period from 1.12 trillion won to 1.73 trillion won, and the number of borrowers rose from 100,000 to 155,000. The arrears rate climbed from 6% to 8.01%. In the first quarter of this year, the outstanding loan balance rose to 1.75 trillion won and the number of borrowers to 156,000, while the arrears rate expanded to 8.56%.