[Alpha Biz= Reporter Kim Minyoung] Self-employed individuals are facing the highest loan delinquency rates in 9 years and 6 months due to prolonged high interest rates and economic downturn. 

 

According to the Financial Supervisory Service on the 16th, as of the end of May, the delinquency rate (delinquency of principal and interest for more than 1 month) across all sectors excluding large corporations rose. Particularly, the delinquency rate for loans to individual business owners (self-employed individuals) increased by 0.08 percentage points from April to 0.69%. This marks the highest level since November 2014 (0.72%). 

 

The prolonged high interest rate environment and economic downturn are exacerbating financial difficulties for self-employed individuals. According to the National Tax Service, the number of self-employed individuals who filed for closure last year reached a record high since statistics began in 2006, totaling 986,487.

As of the end of May, the overall delinquency rate for won-denominated loans by domestic banks also increased to 0.51%, up by 0.03 percentage points from the previous month. The overall delinquency rate hit its highest level in 4 years and 9 months in February at 0.51%, decreased slightly to 0.43% in March, and has been rising steadily since April (0.48%).

The delinquency rate for corporate loans rose to 0.58%, up by 0.04 percentage points from April (0.54%). The delinquency rate for loans to small and medium-sized enterprises, including self-employed individuals, increased to 0.72% from April (0.66%), rising by 0.06 percentage points. However, the delinquency rate for loans to large corporations decreased to 0.05%, down by 0.06 percentage points. Meanwhile, household loan delinquency rate rose to 0.42%, up by 0.02 percentage points from April.

 

 

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