Self-Employed Individuals in Crisis: Loans and Delinquencies Hit Record Highs

[Economy 365]

In the first quarter of this year, loans and delinquency amounts for self-employed individuals both reached record highs.

According to the Bank of Korea, loans to the self-employed reached 1,095.5 trillion won at the end of the first quarter, nearing 1,100 trillion won for the first time in history. The amount of overdue loans also hit an all-time high of 22.3 trillion won.

The delinquency rate stood at 2.04%, marking the highest level in 10 years and 9 months. The delinquency rate for low-income self-employed individuals reached its highest point in 10 years and 3 months, while that for high-income self-employed individuals also hit a 10-year and 9-month high.

Instability has also increased in the non-banking financial sector, where many vulnerable borrowers are concentrated.

The delinquency rate for loans to sole proprietors at savings banks reached 12.79%, the highest in 11 years, while the rate at specialized credit finance companies hit 3.98%, the highest in 12 years.

The Bank of Korea estimated that if the base interest rate rises by 0.25 percentage points, the annual interest burden for self-employed individuals would increase by 1.8 trillion won, or an average of 560,000 won per person.

*This article was produced using AI audio.
※ Please note: This article was translated by AI and may contain errors.