As the "triple high" of high interest rates, high inflation, and a strong dollar continues, overdue debt among self-employed individuals has surged by more than 12 percent.

According to the "Q1 2026 Small Business Trends" report released by Korea Credit Data (KCD) today (June 23), the total outstanding loan balance for individual business owners in Korea reached 732.2 trillion won in the first quarter of this year, an increase of approximately 3 trillion won (0.4%) from the previous quarter (Q4 2025).

Of this total, loans from commercial banks remained at 433 trillion won, the same level as the previous quarter, while loans from non-banking financial institutions, such as savings banks and mutual finance companies, rose to 299 trillion won, up 3 trillion won (1.0%) from 296 trillion won in the previous quarter.

The total amount of overdue debt, where principal and interest payments were not made on time, reached 14.6 trillion won, an increase of approximately 1.6 trillion won (12.6%) from the previous quarter.

Outstanding overdue debt from commercial banks stood at 2.7 trillion won, while non-banking institutions accounted for 11.9 trillion won.

Although the overdue debt of individual business owners had decreased by 4.1% in the fourth quarter of last year—marking the first decline in nine quarters since data collection began in the third quarter of 2023—it saw a sharp increase again in the first quarter of this year.

The persistent high-interest rate environment appears to have increased the debt repayment burden for the self-employed.

Among individual business owners with outstanding loans, 501,000 out of 3.608 million businesses (13.9%) were found to be in a state of closure.

The average outstanding loan balance per closed business is 64.35 million won, with an average overdue amount of 7.42 million won.

Sales saw a slight increase compared to last year, driven mainly by certain food service sectors such as cafes and bakeries.

In the first quarter, the average sales per individual business were 42.58 million won, a 1.89% increase from a year ago.

However, this represents a 13.38% decrease compared to the previous quarter (Q4 2025).

By sector, the popularity of desserts like "Dubai chocolate cookies" at the beginning of the year led to significant year-on-year sales growth for cafes (+7.2%) and bakeries/dessert shops (+11.4%).

Conversely, sales declined in sectors such as fast food (-2.9%), Western cuisine (-2.0%), and Japanese cuisine (-1.8%).

The accommodation and travel service industry (-4.9%) and the arts, sports, and leisure-related sectors (-5.1%) have now seen year-on-year sales declines for four consecutive quarters.

Average business expenses per establishment were 32.59 million won, a 3.36% increase from last year.

Profit, calculated by subtracting expenses from sales, stood at 9.99 million won, a 2.63% decrease.

The operating profit margin was 23.5%, down 1.09 percentage points (p) from last year.

Despite large performance bonuses paid by companies like Samsung Electronics and SK Hynix due to strong semiconductor exports in the first quarter, there was no "special" effect leading to increased sales in nearby commercial districts.

An analysis by Korea Credit Data of 486 stores in Icheon, Gyeonggi Province, where the SK Hynix headquarters is located, showed that even though Hynix paid profit-sharing bonuses in early February, the year-on-year sales growth in the surrounding commercial area for the first quarter was only 0.8%.

This growth rate was lower than the 5.6% increase recorded last year.

By sector, sales in the food service industry fell by 1.1%, while the service industry (+0.5%) and the retail industry (+9.1%) saw increases.

(Photo: Yonhap News)