S Koreans face rate cliff as loans rise
Surge in personal loans prompts warnings that bankruptcies will disrupt economy
Seoul
A SURGE in South Koreans taking out non-bank, personal loans has prompted warnings that bankruptcies will disrupt an already slowing economy.
"As the income gap grows, more people will encounter an interest rate cliff," said Cho Nam Hee, president of the Financial Consumer Agency, describing the steep jump in borrowing costs to over 20 per cent faced by customers rejected by banks. The amount of debt owed to personal loan providers such as APRO Financial Co's Rush&Cash rose to 13.3 trillion won (S$16 billion) in 2015, a nearly 13-fold increase since the Financial Services Commission (FSC) started compiling data in March 2008.
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
International
Hong Kong faces uphill battle to lure back Chinese tourists
Weak yen boosts tourist wallets in Japan
Gas prices are putting Washington’s boldest climate policy at risk
India collects record 2.10 trillion rupees as goods and services tax in April
China travel surges for May holiday but consumers remain wary
Macau casinos remain resilient in April as consumers seek fun