A recent report from the Bank for International Settlements rang yet another alarm bell over Korea’s rising level of household debt. The ratio of the country’s household debt to gross domestic product hovered above 84 percent in 2014, the highest among 14 key emerging economies surveyed in the quarterly BIS report. The average ratio of the emerging countries was 30 percent. Korea’s household-to-debt ratio also surpassed the average figure for 12 major developed countries at 78 percent.

Korea saw the ratio increase by 12 percentage points from 2009 to 2014, while the corresponding average figure for the emerging economies rose by 10 percentage points during the same period. The ratio of the 12 advanced countries slid by 7 percentage points on average over the five-year period.

The BIS report put Korea’s total household debt at $1.15 trillion last year, up $380 billion from five years earlier. The country’s household debt -- particularly mortgage loans -- has continued to increase sharply this year, with the Bank of Korea keeping its key interest rate at a record low of 1.5 percent.

The ballooning household debt is hampering the government’s efforts to boost domestic consumption. What is further worrisome is that the debt problem could spin out of control if the Korean economy is jolted by any fallout from China’s financial turmoil and a potential U.S. interest rate hike.

Financial authorities have vowed to push for a plan drawn up to manage household debt and take additional measures if necessary. Lenders will be closely monitored and made to refrain from disbursing excessive credit to households under a new screening system for home-backed loans, which will be put into practice next year.

Attention should particularly be paid to the steep increase in debt of low-income households and the self-employed.

According to data recently submitted by the Financial Services Commission to the parliament, financial debt of the lowest 20 percent income households on average amounted to 8.68 million won ($7,340) at the end of 2014, up 40.9 percent from two years earlier, compared to an increase of 11.2 percent for total households. Loans to self-employed people soared by 12.3 percent from a year earlier to 223 trillion won in June, outpacing the 3.2 percent rise in household debt over the same period.

Tightening requirements for additional lending will most likely exacerbate their financial predicament. Financial officials seem to believe an increase in defaulted low-income households may not disrupt the whole banking system as the amount of their debt is small.

But this attitude may be seen as somewhat irresponsible, given the government has encouraged households to borrow more by easing conditions on bank loans in recent years. Measures need to be worked out to prevent low-income families from tumbling into financial despair.

What is most important is to help them earn income steadily by creating more jobs. It should be noted that many people have been driven into unprofitable self-employed business because they cannot find proper jobs to make a living.