S. Korea’s household loans soars US$8.9 bil. in October

Recently the Korean government announced new
measures to try and bring down the amount of debt burdening Korean households. But data last month show just the opposite
happening — borrowing jumped in October by the most in five months… due to a long holiday
and lending by new online banks. Our Lee Jeong-yeon has the details. Just last month, South Korea’s finance ministry
set out new measures aimed at curbing the country’s ever-rising housing debt. It has tightened the income screening for
borrowers,… and there are more regulations to come in the latter half of next year regarding
the debt-service ratio. These measures are aimed at reducing the annual
rise in household debt to under eight percent. However, according to the Financial Services
Commission, household loans soared by 10-trillion won in October, the biggest jump in five months,…
meaning a total rise so far this year of 74-trillion won, or about 66-billion U.S. dollars. The agency explained that this is because
of the extra long break for Chuseok last month, which caused a sudden increase in demand for
cash,… as well as new online-only banks like Kakaobank and K bank which have been
lending more. (Korean)
“Housing debt is something accumulated over a long period of time, so one or two policies
cannot suddenly get rid of it. The government knows it will take just as
long to bring it down as it took to pile up.” The expert added that there needs to be synergy
between the government’s previous measures to cool down the property market and the latest
ones on household loans… for them to really have an effect on the economy. Lee Jeong-yeon, Arirang News

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