Loan Balances and Number of Borrowers in Loan Industry Rise in Second Half of Last Year

The loan balance and the number of borrowers in the consumer finance industry increased during the second half of last year.

The delinquency rate for large consumer finance companies, which had exceeded 12 percent, also fell to the 10 percent level.

According to the Results of the Survey on Consumer Finance Industry for the Second Half of 2025 released by the Financial Supervisory Service (FSS), the total loan volume of the entire industry stood at 13.1402 trillion won as of the end of last year, an increase of 684.9 billion won, or 5.5 percent, from the end of June last year.

The FSS explained, "As funding conditions improved, with the base interest rate falling to 2.5 percent per annum, personal credit loans from large consumer finance companies increased by 94.8 billion won, and large-scale loans to affiliates rose by 306.8 billion won."

By loan type, credit loans amounted to 5.393 trillion won and secured loans reached 7.7472 trillion won, marking increases of 6 percent and 5.1 percent, respectively.

The number of borrowers in the consumer finance industry also rose to 731,000, an increase of 14,000, or 2.0 percent, from the first half of the year.

The overall average interest rate for registered consumer finance lenders was 13.9 percent per annum, the same as it was at the end of June last year.

However, the overall average interest rate appeared lower than the personal credit loan rate because it included corporate credit loans and secured loans, which carry relatively lower interest rates.

For large consumer finance companies with assets of 10 billion won or more, the personal credit loan interest rate per person was 18.8 percent per annum, up 0.7 percentage points.

The average personal credit loan balance per person was recorded at 5.69 million won, an increase of 100,000 won.

The delinquency rate for loans overdue by 30 days or more at large consumer finance companies was 10.2 percent, down 1.9 percentage points from 12.1 percent in the first half of last year.

This was due to the expansion of delinquent debt sales, which reduced the delinquent balance by 120.4 billion won, as well as an increase in new loans to high- and medium-credit borrowers and affiliates.

Meanwhile, as of the end of last year, the number of registered consumer finance lenders was 7,696, a decrease of 507 from the first half of last year.

This was primarily the result of a decrease of 523 small-scale individual lenders registered with local governments.

Regarding the expansion of business toward high- and medium-credit borrowers in the industry, the FSS stated, "We will strengthen supervision, such as monitoring the status of credit loans for low-credit individuals, to ensure that credit supply to vulnerable groups does not shrink."

In addition, the FSS plans to cooperate with local governments to pre-inspect and provide guidance on whether lenders registered with local governments meet the equity capital requirements under the revised Consumer Finance Act.
※ Please note: This article was translated by AI and may contain errors.