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THE INVESTOR] South Korea’s household debt jumped more than 36 trillion won (US$ 31.70 billion) during the first five months of the year, Bank of Korea data showed.
The rate of increase is higher than that recorded in the same period last year, in stark contrast to the government’s projections that the rate of increase will drop.
According to the data, loans taken out by Korean households taken out from all depository institutions increased by 36.21 trillion won during the first five months of the year to come in at 956.17 trillion won. Depository institutions include banks, and non-bank depository institutions that include mutual savings banks and credit unions.
The rapid rise seen this year is fueled by the increase in loans taken out from non-banking institutions.
BOK’s data showed that bank loans increased at a slower rate during the first five months of 2016 than that seen during the same period last year. However, loans from non-bank depository institutions increased at more than double the pace compared to last year.
Household loans non-bank depository institutions increased 14.19 trillion won during the first five months of the year. In comparison, households’ loans from such institutions increased by 4.17 trillion won during the same period last year.
Bank loans showed an increase of 16.8 trillion won during the first five months of this year. During the same period last year, an increase of 18.16 trillion won was recorded.
The shift toward non-bank depository institutions is thought to have been fueled by tougher assessments in approving loans implemented by banks.
By Choi He-suk (
cheesuk@heraldcorp.com)
