Increased Loans and Delinquencies Among People in Their 20s: "Only Debt Grows Instead of Employment"

On the 14th, candidates lined up to enter the written exam for the 2020 first half Korea Railroad new employee recruitment held at a university in Seongbuk-gu, Seoul. Photo by Mun Ho-nam munonam@

[Sejong=Asia Economy Reporter Kim Hyunjung] The loan amounts and delinquent loan amounts among people in their 20s are increasing. Due to difficulties in finding employment caused by the spread of the novel coronavirus infection (COVID-19), the increase rate is rapidly rising compared to other age groups.

On the 22nd, the National Fiscal Research Institute analyzed loan and loan delinquency data as of the end of June for 47.14 million people aged 20 and over from the credit information company Korea Credit Bureau (KCB). Last month, the average loan amount per person in their 20s was 6.71 million KRW, up 2.7% from the previous month, and the average credit loan amount per person was 1.26 million KRW, up 3.4%. These figures significantly exceed the average increase rate of total loan amounts (0.5%). The average loan amount per person for all subjects surveyed was 34.87 million KRW, and the credit loan amount was 6.74 million KRW, which increased by 1.01% compared to the previous month.

The loan scale for elderly people in their 60s and 70s decreased. The average loan amount per person in their 60s was 35.48 million KRW, down 0.02% from the previous month, and the credit loan amount was 4.91 million KRW, down 0.33%. For those in their 70s, the loan amount was 15.23 million KRW, down 0.11%, and the credit loan amount was 1.43 million KRW, down 0.51%. Additionally, for people in their 30s, the average loan amount and credit loan amount increased by 1.33% and 2.31%, respectively, compared to the previous month, and for those in their 40s, they increased by 0.52% and 1.15%, respectively.

Delinquent loan amounts, which are loans not repaid after borrowing, also increased significantly among people in their 20s. Last month, the average delinquent amount per person in their 20s was 104,000 KRW, up 3.3% from the previous month. However, the absolute scale of delinquent amounts was higher among people in their 40s to 70s. Although it decreased by 0.48% from the previous month, the average delinquent amount per person in their 60s was 33 million KRW; for those in their 50s, it decreased by 0.76% to 28.29 million KRW; and for those in their 70s and 40s, it decreased by 0.24% and 0.41% to 16.92 million KRW and 15.87 million KRW, respectively.

Based on the loan amount increase rate compared to the previous month, Daejeon (30.43 million KRW) showed the steepest increase at 0.78%. Seoul (36.83 million KRW), Sejong (56.07 million KRW), Jeonbuk (27.71 million KRW), and Daegu (32.19 million KRW) also increased by more than 0.6%, ranking high in the increase rate.

Based on loan amounts by region, the loan amounts in Seocho-gu and Gangnam-gu in Seoul exceed twice the national average. In the analysis by basic local government units, the average total loan amount per person is 34.81 million KRW, while Seocho-gu reaches 65.01 million KRW and Gangnam-gu 63.31 million KRW. Credit loan amounts also exceed the average (6.74 million KRW), with Seocho-gu at 14.14 million KRW and Gangnam-gu at 13.52 million KRW. Based on delinquent amounts, Haenam-gun in Jeonnam (7.08 million KRW), Jung-gu in Seoul (6.87 million KRW), Jongno-gu in Seoul (4.47 million KRW), and Yongsan-gu in Seoul (4.31 million KRW) ranked highest.