S. Korea’s household loans soars US$8.9 bil. in October

Recently the Korean government announced new measures to try and bring down the amount of debt burdening Korean households But data last month show just the opposite happening — borrowing jumped in October by the most in five months

due to a long holiday and lending by new online banks Our Lee Jeong-yeon has the details Just last month, South Korea's finance ministry set out new measures aimed at curbing the country's ever-rising housing debt

It has tightened the income screening for borrowers, and there are more regulations to come in the latter half of next year regarding the debt-service ratio These measures are aimed at reducing the annual rise in household debt to under eight percent

However, according to the Financial Services Commission, household loans soared by 10-trillion won in October, the biggest jump in five months, meaning a total rise so far this year of 74-trillion won, or about 66-billion US

dollars The agency explained that this is because of the extra long break for Chuseok last month, which caused a sudden increase in demand for cash, as well as new online-only banks like Kakaobank and K bank which have been lending more

(Korean) "Housing debt is something accumulated over a long period of time, so one or two policies cannot suddenly get rid of it The government knows it will take just as long to bring it down as it took to pile up" The expert added that there needs to be synergy between the government's previous measures to cool down the property market and the latest ones on household loans for them to really have an effect on the economy Lee Jeong-yeon, Arirang News

Source: Youtube

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