4th quarter of last year… Nearly 400 trillion in debt balance
Working money is covered by debt due to business difficulties
Self-employed loans are on the rise. It is analyzed that this is because the number of self-employed persons who are in debt to cover the operating funds is increasing as the management difficulties caused by Corona 19 are intensifying.
According to the data released by the Bank of Korea on the 3rd,’Loans for Deposit Handling Organizations in the 4th Quarter of 2020,’ the balance of deposit bank loans of unincorporated companies (self-employed) reached a record high of 398 trillion won at the end of the fourth quarter of last year. It increased by 10.4 trillion won from the previous quarter.
In 2019 alone, self-employed deposit bank loans increased by an average of 5.8 trillion won per quarter. The largest increase in the third quarter of 2019 was 6.9 trillion won. However, after an increase of 7.6 trillion won in the first quarter of last year, the increase soared to 21.2 trillion won in the second quarter. In the third quarter, it fell to 910 trillion won, but the increase in the fourth quarter again exceeded 10 trillion won.
It is analyzed that this is because the management difficulties of self-employed people increased due to the strengthening of social distancing measures. The measures to distance the metropolitan area were upgraded from the 1.5 stage on November 24 last year to the 2.5 stage on December 8.
Loans for service businesses with many self-employed businesses are also on a steep rise. In the fourth quarter of last year, loans to deposit handling institutions (banks + non-banks) in the service sector were 880 trillion won, an increase of 28.700 billion won from the previous quarter. Service loans increased by KRW 34 trillion in the first quarter of last year, KRW 47 trillion in the second quarter, and KRW 28 trillion in the third quarter. This is higher than the average quarterly increase in 2019 (1.6 trillion won).
Han Eun Financial Statistics Team Leader Song Jae-chang said, “The increase in corona 19 confirmed cases in the fourth quarter of last year deteriorated the business conditions such as accommodation and restaurants, leading to an increase in loans.”
On the other hand, loans to the manufacturing industry decreased by 2.2 trillion won from the previous quarter. As for the manufacturing industry, the industry recovered due to improved exports, and an increase in temporary repayments to manage the financial ratio at the end of the year led to a decrease in loans, explained the bank.
Reporter Seo Min-joon [email protected]
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