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Biz News Korea(Eng)
P2P lending in Korea nearly quadruples, delinquency rate also soars
- Collected
- 2018.01.08
- Distributed
- 2018.01.09
- Source
- Go Direct
According to Korea P2P Finance Association, cumulative P2P lending of its 64 member companies amounted to 1.8 trillion won ($1.7 billion) as of the end of December in 2017, almost quadrupling from 468.2 billion won in the previous year. Their outstanding balance of P2P loans also more than doubled to 829.6 billion won from 311.8 billion won over the same period.
Cumulative loans for real estate project financing that rose 54.1 billion won against a year-ago period to 609.4 billion won as of the end-December last year accounted for the lion’s share of the entire P2P lending, followed by real estate mortgage loans reaching 472.8 billion won, other mortgage loans with 365.3 billion won and credit loans with 355.7 billion won.
The rapid growth of P2P financing has raised alarms on the surging delinquency rate. The delinquency rate, the share of loans overdue for 30 to 89 days, jumped to 3.95 percent as of the end-Dec in 2017 from 0.42 percent in the previous year. The default rate that counts loans more than 90 days past due also soared to 1.64 percent from 0.54 percent over the same period.
Last year, a local P2P lender Fundu caused a stir with its delinquency rate reaching 90 percent, and the association expelled the company in November. It said that it will support its member companies to strengthen protection for investors and to implement sound risk management solutions.
By Oh Chan-jong and Choi Mira
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]