Number of Credit Delinquents Exceeds 3 Million

The number of credit delinquents has exceeded 3 million people in Korea and is seeing rapid increases. Every month, over 100,000 people are added to credit lenders` blacklists.

The government`s economic stimulus packages are believed to have driven Koreans to excessive spending beyond their income levels.

The Korea Federation of Banks (KFB) announced yesterday that as of the end of April, the number of delinquent borrowers totaled 3,086,018, up by 4.37% from 129,224 in March.

The number of credit delinquents increased by the highest monthly margin in April of this year.

By age group, those in their 20s and 30s accounted for half of the total number at 575,074 and 864,162, respectively. Among them, growth of the blacklist was measured at 4.50 to 4.98 percent.

The number of people failing to settle credit card debts grew by 5.8% or 102,732 from the previous month. The new list contains 1,869,433 people.

By financial industry, non-life insurance companies witnessed the highest jump at 13.5% while foreign banks, considered relatively less vulnerable, saw a 10.9% increase in credit delinquency.

The KFB explained that “liquidity-strained card companies have strengthened management on settlement delays and debts, of which blacklisted individuals with poor credit records are clustered as credit defaulters,” showing prospects for a further increase in default creditors for the time being. In the meantime, credit card issuers are changing focus from issuing new loans to collecting outstanding loans and arrears as most card loans mature in the second half of the year.

Do-Young Kim nirvana1@donga.com