Posted December. 22, 2005 03:02,
Individual debt to financial companies amounts to some 11.17 million won per person, according to recent reports.
The individual debt-asset ratio has already more than doubled, dropping to a record low. This means paying off debts has become even more difficult.
According to fund flow trends for third quarter (July to September) reported by Bank of Korea (BOK) on December 21, the debt scale in the individual sector (households, small private firms, and private non-profit organizations) led to about 548 trillion won as of the end of September, increasing by 2.9 percent from the end of June.
When taking this figure and dividing it by the countrys population (based on the end of last year), per capita debt amounts to about 11.17 million won.
On the other hand, financial assets for individuals increased a mere 1.7 percent to 1,099.6 trillion won at the end of September, recording the lowest debt-asset ratio in history at 2.01.
This ratio, which had been 2.07 at the end of March, continued to drop to 2.03 in June and 2.01 in September, and is quite lower than the ratios of the U.S. (3.3) and Japan (4.2).
Kim Young-heon, assistant director of the fund flow team at the BOKs economic statistics department, said, If evaluating marketable securities, a part of an individuals financial assets, is done at market price and not at the purchase price, the debt-asset ratio will go up.
Meanwhile, credit card loans, which accounted to 10.7 percent of household debts in 2002, dropped to 4.5 percent last year and 3.7 percent as of the end of this September, showing that the composition of household debts is becoming sound.