May. 3. 2022
Bank loans to households fell in April amid high borrowing costs and strict lending rules
|A sales office of a commercial bank in Seoul / Newsis|
Household loans from five major banks fell for the fourth consecutive month in April amid high borrowing costs and strict lending rules, industry data showed on Monday.
Outstanding household loans from banks in South Korea – KB Kookmin, Shinhan, Hana, Woori and Nonghyup – stood at 702.39 trillion won ($555.2 billion) at the end of April, down by 802 billion won from the previous month, according to data provided by banks.
The cut came as the Bank of Korea raised its benchmark rate by a quarter of a percentage point to 1.5% – the fourth rate hike since August last year – in April to curb inflation and limit household debt.
The government has maintained a tight grip on lending amid concerns that rapidly rising household debt could become a potential risk factor for economic growth.
Observers said people also tend to delay decisions to borrow money as the new incoming government is increasingly expected to ease borrowing rules when it takes office. next week.
Of the total, these banks’ outstanding unsecured loans stood at 132.46 trillion won at the end of April, down 939 billion won from the previous month. Their home secured loans meanwhile increased by 479.4 billion won over the same period to 23.32 trillion won, the data showed. (Yonhap)