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Finance

Household loans jump 9.3 trillion won in a month as regulators trigger emergency management

Household loans across South Korea’s financial sector rose 9.3 trillion won in May, sharply above April’s increase and a year earlier. Mortgage lending growth slowed, but other loans, including credit loans, swung to an increase and drove the overall rise. Regulators held a debt monitoring meeting and plan weekly checks on firms that miss management targets. Banks will pursue voluntary measures such as cutting new credit loan limits for high earners.

Finance

KakaoBank supplies 1.2 trillion won in mid to low credit loans using non-financial data

KakaoBank is expanding loans to mid and low credit borrowers using an alternative credit scoring model built solely on non-financial data. The bank said it additionally supplied 1.2 trillion won in such loans by reassessing applicants rejected under financial-data models. About 12 percent of mid to low credit loans handled since adopting the model in 2023 went to individuals and sole proprietors newly selected through alternative-data evaluation. Cumulative supply since July 2017 has exceeded 16 trillion won.

Finance

Overdue debt collection practices to change after tax breaks on written-off loans

South Korea\'s financial regulators plan to curb the practice of financial companies repeatedly extending the statute of limitations on overdue loans while continuing collection efforts after receiving tax benefits. Under revised rules, firms will need to let the statute of limitations run its course when it first comes due to have personal overdue loans recognised as losses. The changes also tighten requirements for selling such debts, introduce reporting and disclosure systems, and revise related guidelines and supervision rules.