775,485 Defaulters... 26.8% Are Small Borrowers with Loans Under 5 Million Won

[Asia Economy Reporter Kwangho Lee] One in four debt defaulters is a small loan borrower with 5 million won or less.

According to data received on the 24th by Min Hyung-bae, a member of the National Assembly's Political Affairs Committee from the Democratic Party of Korea, from the Korea Credit Information Services, as of the end of June, the number of people registered as financial debt defaulters due to arrears of three months or more was 775,485.

Among them, 430,133 people (55.5%) were registered as defaulters at two or more financial institutions (multiple financial debt defaulters). Among multiple financial debt defaulters, 323,579 people (75.2%) were defaulters related to credit card debt.

By age group, financial debt defaulters were most numerous among those aged 50 and over at 45.7% (354,274 people), followed by those in their 40s at 25.7% (199,273 people), 30s at 17.9% (138,906 people), 20s at 10.6% (82,545 people), and teens at 0.06% (487 people).

When classified by amount (total principal and interest of overdue loans), those with loans exceeding 30 million won were the largest group at 30.1% (233,035 people), and small loan borrowers with 5 million won or less also accounted for 26.8% (207,713 people).

Those with loans exceeding 10 million won but not exceeding 20 million won accounted for 17.6% (136,734 people), those exceeding 5 million won but not exceeding 10 million won were 15.6% (121,179 people), and those exceeding 20 million won but not exceeding 30 million won were 9.91% (76,824 people).

Representative Min said, "The number of people struggling with their livelihoods due to COVID-19 has increased," adding, "For small defaulters with 5 million won or less, rather than neglecting their ongoing delinquency history, proactive recovery support policies such as credit forgiveness will be more beneficial to the national economy in the long term."

Meanwhile, the financial authorities have decided to grant credit forgiveness to individuals and sole proprietors who have overdue debts of 20 million won or less since last year due to the COVID-19 situation but have fully repaid them by the end of this year.