Small merchants' sales and profit fell together in the third quarter this year, while overdue amounts on loans to individual business owners topped 16 trillion won. Small merchants' sales returned to a year-on-year decline for the first time in five quarters, and overdue loan amounts rose for a third straight quarter, showing profitability and debt repayment burdens for self-employed people worsening at the same time.

According to Korea Credit Data's (KCD) "2026 third-quarter small merchant trend report" released on Monday, average sales per store for small merchants nationwide was 46.61 million won, down 4.36 percent from a year earlier.

Over the same period, average spending fell 3.20 percent to 36.41 million won, but the larger drop in sales pushed average profit down 8.30 percent to 10.20 million won. The profit margin was 21.9 percent, down 0.94 percentage point from a year earlier.

Small merchants' sales rose 1.01 percent and 3.96 percent in the first and second quarters, respectively, from a year earlier, but turned to a decline in the third quarter. Profit margins have fallen for three straight quarters this year from a year earlier.

By sector, weakness was notable in food service and distribution. Sales fell across all sub-sectors. In services, sales in arts, sports and leisure-related sectors fell 11.2 percent, the biggest decline.

◆ Individual business owner loan delinquencies rise for third straight quarter

Along with weak sales, delinquency burdens on individual business owner loans also expanded. Outstanding individual business owner loans in the third quarter rose 0.1 percent from the previous quarter to 736.6 trillion won, but delinquent amounts increased 7.3 percent to 16.4 trillion won. Delinquent amounts extended gains for a third straight quarter after rising 12.6 percent in the first quarter and 4.3 percent in the second quarter.

In particular, delinquent amounts in the non-bank sector rose 8.1 percent from the previous quarter to 13.6 trillion won. Delinquent amounts as a share of outstanding loans were 6.0 percent at savings banks and 3.7 percent at mutual finance institutions, up 0.3 percentage point and 0.2 percentage point, respectively, from the previous quarter.

Of 3,634,000 business sites holding individual business owner loans, 505,000 were closed, accounting for 13.9 percent of the total. Average outstanding loan balances and delinquent amounts at closed businesses were 65.63 million won and 8.11 million won, respectively, both up from the previous quarter.

Kang Ye-won (강예원), head of data at Korea Credit Data, said, "As this signals that weak sales are spreading into weakened repayment capacity, swift measures are needed that can directly support a recovery in small merchants' sales."