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Self-employed biz lending accounts for 33.9 percent of SME loans

Dec. 25, 2011 - 18:17 By Korea Herald

The amount of money borrowed by self-employed entrepreneurs accounted for 33.9 percent of all loans taken out by small and medium enterprises, data showed Sunday, raising worries it may weigh on government efforts to curb private sector debt.

Korean lenders extended loans worth 157.9 trillion won ($137.4 billion) to self-employed business-people as of the end of November, from a total of all SME loans that reached 465.2 trillion won, according to the data from the Financial Supervisory Service.

The figure jumped by 12.3 trillion won in the January-November period, accelerating from a 5.4 trillion won gain in the same period a year earlier, the FSS said.

It was also faster growth than the annual increase of 9.1 trillion won in 2009 after the 2008 global financial crisis, the watchdog said.

Meanwhile, the delinquency rate on loans to self-employed borrowers reached 1.06 percent as of the end of October, gaining 0.2 percentage point from the end of last year, according to the FSS.

Korea has stepped up efforts to rein in private sector loans alongside concerns that sluggish economic growth may forestall repayment of outstanding debts.

As of the end of November, corporate loans by local banks stood at 595.6 trillion won, while household loans reached 450.6 trillion won, according to the FSS.

(Yonhap News)