OK저축은행 저신용대출According to the Korea Federation of Savings Banks, as of the end of the third quarter of this year, 37 out of 79 domestic savings banks had a small credit loan balance of 1 billion won or more. The small credit loan balance handled by these savings banks was 1.1129 trillion won, an increase of 144.7 billion won (14.9%) compared to the same period last year (968.2 billion won). Savings banks with a small credit loan balance of 1 billion won or less are not required to disclose the information. A small credit loan is a loan product that allows borrowing from 3 million won to a maximum of 5 million won without collateral. The loan period is usually short, around 1 to 5 years, and the average interest rate is high, approaching the legal maximum interest rate of 20%, but since money can be borrowed on the same day as application, it is often used as living expenses for vulnerable borrowers such as low-credit and low-income borrowers who need urgent funds. Looking at the top 10 savings banks (SBI, OK, Korea Investment, Welcome, Pepper, Acuon, Daol, Sangsangin, Shinhan, and Moa) in terms of asset size, the balance as of the third quarter was 830.9 billion won, accounting for about 75% of the total balance. Compared to the same period last year (702.7 billion won), it increased by 128.2 billion won (18.2%).
Among them, OK Savings Bank’s balance growth was notable. OK Savings Bank’s small credit loan balance in the third quarter of last year increased by 84.4% (166.2 billion won) from 196.9 billion won to 363.1 billion won in the third quarter of this year.
While the balance of small credit loans increased, household loans across savings banks are decreasing. According to the Bank of Korea, as of the end of September, the balance of household loans under mutual savings bank business was 39.823 trillion won, a decrease of 806.9 billion won from 40.6299 trillion won in September of last year.
The reason why small credit loans are showing an increase despite the decrease in household loans is that the demand for emergency funds from ordinary citizens who are struggling financially due to the prolonged high interest rates and high prices is increasing.
The problem is that the risk of default is likely to increase as the balance increases due to the high demand for emergency funds and high interest rates of small credit loans.
In fact, the average delinquency rate of small credit loans for 37 savings banks with a balance of 1 billion won or more as of the end of the third quarter of this year was 11.62%, up 1.3 percentage points from the same period last year (10.32%). This is a significantly higher rate compared to the total loan delinquency rate of 6.15% for savings bank business in the third quarter of this year. Some savings banks have seen their delinquency rates rise by more than 10 percentage points in a year. In the case of Hana Savings Bank, the delinquency rate for small credit loans was 13.61% at the end of the third quarter of last year, but it soared to 34.66% at the end of the third quarter of this year, a sharp increase of 21.15 percentage points. Must Samil Savings Bank recorded the highest delinquency rate among savings banks, rising 13.19 percentage points from 59.31% to 72.5% during the same period. A savings bank industry insider said, “Small credit loans are not subject to the debt service ratio (DSR) regulation, so they are considered the last resort for low- and mid-credit borrowers who have difficulty getting credit loans elsewhere,” adding, “The fact that the balance has increased despite the high interest rate and small loan amount is evidence that the economy is struggling.” He continued, “As it is a loan method at the end of the secondary financial sector, it is used by vulnerable borrowers such as those with medium and low credit scores,” and added, “Since small credit loans have a high demand for emergency funds and high interest rates, the risk of delinquency is high.”
