The amount of overdue business loans taken by self-employed business owners in South Korea surpassed 10 trillion won ($7.2 billion) for the first time ever in the first quarter of this year, marking the highest figure ever since the government started tallying the figure in 2009.
Overdue business loans of self-employed business owners were an accumulated 10.8 trillion won as of late March, according to a report the Bank of Korea submitted to Rep. Yang Bu-nam of the main opposition Democratic Party of Korea on Monday. The report compiled the amount that had been late for at least a month, using data submitted by financial institutions across the country.
The figure marked a jump from 8.4 trillion won in the fourth quarter of last year, and more than quadrupled from 2.6 trillion won in the last quarter of 2021. Payment for 1.66 percent of the business loans was late, the highest since 1.79 percent in the first quarter of 2013.
Statistics Korea defines self-employed business owners as those who employ at least one person -- including him or herself -- in the operation of one's business, which is not registered as a firm. Its report showed that there were 5.52 million self-employed business owners as of January, 4.09 million of whom did not have any other employees.
With household loans added, self-employed people owed a total of 1,055.9 trillion won in loans as of the first quarter to their banks and other institutions across the country. This marked an increase from 1,053.2 trillion won in the previous quarter, again an all-time high.
In terms of household loans, the BOK presumed that 19.73 million South Koreans as of the first quarter were indebted for an accumulated 1,852.8 trillion won, averaging 93.89 million won per person.
The average debt-service ratio -- the ratio of a person's debt service payments in proportion to his or her annual income -- was 38.7 percent, which means an average person with a household loan spends 38.7 percent of annual income on paying off debt.
