Wage workers' debt rises 7 pct; loans to young people jump 15 pct in 2021

National 12:02 March 28, 2023

SEOUL, March 28 (Yonhap) -- Debt held by South Korean wage workers in their 20s jumped 15 percent on-year in 2021, much higher than 7 percent growth on average for all wage workers, data showed Tuesday.

Bank and nonbank loans extended to paid workers in the country averaged 52.02 million won (US$40,107) per person as of end-2021, up by 3.4 million won from a year earlier, according to the data from Statistics Korea.

It is the first time that wage workers' per capita debt surpassed 50 million won since 2017, when the agency began compiling the data.

But the growth rate slowed down in 2021 from the previous year's 10.3 percent, as the government tightened lending regulations in the wake of mounting debts amid the COVID-19 pandemic and the real estate market boom.

By age group, loans extended to wage workers in their 40s were highest at 76.38 billion won, followed by 30-somethings with 71.68 million won and those in their 50s with 60.57 million won.

The figure for those in their 20s came to 16.91 billion won, up 15.4 percent on-year, the largest growth rate among all age groups, the data showed.

The loan delinquency rate for wage workers stood at 0.41 percent in 2021, down 0.09 percentage point from a year earlier, according to the data.

Analysts have pointed out that wage workers' growing debt is feared to hamper their capacity to service debt and emerge as a drag on the country's economy.