An advert for bank card loans is seen on a avenue in Seoul, on this file photograph taken July. 22. (Yonhap)
Loans from financial savings banks, credit score unions and different secondary monetary establishments rose sharply final month as authorities tightened credit score rules for main banks, officers mentioned Sunday.
Loans from financial savings banks, bank card corporations, insurance coverage corporations and different second-tier lenders surged over 1.5 trillion received ($1.02 billion) in October, the most important acquire since July 2021, based on the officers from the monetary sector.
Intimately, money advances and different loans from bank card corporations and capital corporations elevated over 900 billion received in October, and family loans from financial savings banks went up 400 billion received. Insurance coverage loans additionally gained round 300 billion received.
The expansion was attributable to the “balloon impact,” as demand has shifted to second-tier lenders as main banks had been pressured to scale back family loans according to the monetary authorities’ efforts to curb surging family money owed and rein in rising dwelling costs, largely in Seoul and the encompassing areas.
An financial slowdown amid weak home demand additionally appeared to have precipitated extra odd folks and weak courses to show to such mortgage packages regardless of excessive rates of interest, based on the officers.
“The quantity of loans from the secondary sector is predicted to hover properly above the extent deemed acceptable. We’re to take steps to handle the scenario,” a authorities official mentioned.
One of many measures into account is requiring second-tier establishments to submit their annual targets for mortgage quantities, which now could be solely vital for first-tier banks, the official added.
However the authorities should not more likely to implement strict lending restrictions for second-tier establishments, as lots of those that search loans from the sector are low-credit debtors or those that urgently want money for dwelling bills quite than mortgages, different officers mentioned. (Yonhap)
