People in their 30s in South Korea have an average bank loan exceeding 100 million won.

South Korea’s central bank (the Bank of Korea) on April 2 submitted materials to a National Power Party lawmaker, Park Seong-jin, who sits on the National Assembly’s Finance and Economy Planning Committee. The documents show that as of the end of last year, in the 30-something age group, the average outstanding balance of bank loans per borrower was 102.18 million won (about RMB 460k), up 3.82 million won year-on-year, for the first time breaking through the 100 million won threshold.

The data show that lending for people aged 30 to 39 has continued to expand, increasing for two consecutive years and reaching the highest level since relevant statistics began in 2013. By contrast, the average loan balance for those aged 20 to 29 was 30.47 million won, down 2.88 million won year-on-year, which has marked a decline for four straight years.

A Bank of Korea official said that tighter regulation of the debt service ratio (DSR) for the total principal and interest repayment of liabilities in 2022 has limited the borrowing capacity of people in their 20s and early 30s, whose incomes are relatively lower. At the same time, the credit-loan share in that age group is relatively high, which also pulls down the overall figure to some extent.

Aside from people in their 20s, loans in all other age brackets increased. Among them, the average loan balance for those aged 40 to 49 reached 117 million won, rising for three consecutive years and hitting a record high. Those aged 50 to 59 and 60 to 69 increased to 96.83 million won and 81.31 million won, respectively. Because loan volumes expanded across most age groups, the overall average outstanding loan balance per borrower rose to 91.52 million won, also setting a record high.

Park Seong-jin said that against the backdrop of a weaker won exchange rate, high prices, and pressure from interest-rate hikes, household debt is becoming a structural risk that threatens the economy. He called for strengthening forward-looking risk management to prevent the debt burden on people in their 30s from worsening and affecting economic vitality. (Yonhap)