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The amount of loans provided by non-bank financial institutions has been snowballing and now
represents about half of the total household debt.
The Bank of Korea says the amount of the loans held by second-tier financial institutions
such as life insurers and mutual savings banks stood at 450 billion U.S. dollars at the end
of last year. It is the highest loan amount from the non-bank
sector since Korea started keeping track of such data in 2002.
Experts say borrowers who rely on non-bank institutions tend to have lower credit ratings,
and with debt defaults and bad loans on the rise, the nation's debt problem could be compounded.