With the stock market rally in the first half of the year spurring more "debt investing," loans against insurance policies and card loans increased at secondary financial institutions, led by people in their 50s and older.
According to data the Financial Supervisory Service submitted to People Power Party lawmaker Lee Jong-uk, a member of the National Assembly's Planning and Finance Committee, as of the end of July this year, the outstanding loan balance of loans against insurance policies at major life insurers (Samsung, Hanwha, Kyobo) and non-life insurers (Samsung, Hyundai, DB, KB, Meritz) was 47.9119 trillion won, up 1.7933 trillion won (3.9%) from the same period a year earlier.
By age group, people in their 50s reached 19.6701 trillion won, up 852 billion won (4.5%), and those 60 and older reached 13.1546 trillion won, up 1.2169 trillion won (10.2%). In contrast, people in their 20s, 30s and 40s fell 4.6%, 4.7% and 1.3%, respectively.
A loan against an insurance policy is a product that borrows money with the insurance payout as collateral and is a representative "recession-type loan."
An official at the financial authorities said, "Normally, the outstanding loan balance of loans against insurance policies decreases at the start of the year, but this year it increased from the beginning," and added, "Given the stock market rally and the timing of initial public offering subscriptions, there is a possibility of 'debt investing.'"
The outstanding balance of card loans, a "quick-cash channel for ordinary people," also edged up. The outstanding balance of card loans at eight standalone card issuers (Hyundai, Lotte, BC, Samsung, Shinhan, KB, Woori, Hana) was 39.5207 trillion won as of the end of July this year, up 418.3 billion won (1.1%) from the same period last year.
Card loans also increased among people in their 50s and older, while they decreased among those in their 20s to 40s. People in their 50s rose by 285.3 billion won (2.1%), and those 60 and older rose by 700.5 billion won (6.9%). In contrast, those in their 20s to 40s fell in the 3% to 4% range.
The delinquency rate for card loans rose across all age groups. People in their 30s posted the biggest increase, up 0.54 percentage points (p). They were followed by those in their 40s (up 0.46 p), 20s (up 0.41 p), 60 and older (up 0.35 p) and 50s (up 0.24 p).
Lee Jong-uk said, "While the government has fueled a speculative frenzy in the stock market by introducing leveraged ETFs, the reality is that ordinary people's debt is steadily rising," and added, "The government must take a stern view of the situation for the working class, conduct a thorough review, and take preemptive measures to manage debt investing and household loans."