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Self-employed sector debt hits 520 trillion won: data

All News 13:51 June 25, 2017

SEOUL, June 25 (Yonhap) -- Debt incurred by self-employed businesses in South Korea reached 520 trillion won (US$456.7 billion) as of late 2016, official data showed Sunday.

The Financial Supervisory Service (FSS) said data provided by Nice Information Service revealed that debt by those that run their own businesses surged by 60 trillion won in one year. In late 2015, debt by such business owners stood at 460 trillion won.

"In effect each of the 1.5 million business owners, on average was 350 million won in debt," it said. The total includes both corporate and personal loans.

The FSS said that while indebtedness has risen there is no need to be worried at present.

The financial regulator said the arrears rate for such loans is low which means people are making money on investments they have made with borrowed money.

On the other hand, it said government officials are keeping tabs on small business taking out loans from the non-banking sector secondary financial firms that demand higher interest rates. This could pose challenges down the line and hurt the overall economy.

Reflecting the developments, the government service said it will start checking loans provided by various financial firms to self-employed people starting this week, and reflect its findings when it announces comprehensive plans to manage household debt later in the year.

Government policymakers have in the past said artificial tightening of loan rules will not resolve the rise debt among small business owners and that the matter needs to be approached in terms of broader fiscal, monetary and employment measures.


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