Despite government efforts to curb household debt, loans owed by South Korean households continued to grow in November.

According to the Bank of Korea (BOK) on Wednesday, household loans extended by financial institutions amounted to 704.6 trillion won ($601 billion) as of the end of November, up 8.8 trillion won from the previous month. It is the highest monthly increase for November since the BOK started compiling related data in 2008.

In particular, the balance of credit loans including housing mortgage loans and overdraft loans increased by a significant amount in November, reaching 529.4 trillion won, up 6.1 trillion won from the previous month. It is the largest increase for November.

The outstanding balance of other loans extended by financial institutions including overdraft loans and deposit mortgage loans amounted to 174.4 trillion won, up 2.7 trillion won during the same period. It is the highest increase since May 2010 when the balance rose by the same amount. The significant increase in November is largely due to high credit card payment demand following the government-orchestrated nation-wide sale event from September 29 to October 31, the BOK said.

Meanwhile, unlike household loans, growth in corporate loans slowed down. As of the end of November, the outstanding balance of corporate loans extended by local lenders amounted to 759.9 trillion won, up 2.6 trillion won from October. The amount is only 57 percent of 4.6 trillion won on-month increase in October and is lower than last year’s 4.4 trillion won increase. The outstanding balance of loans extended to large companies came to 163.9 trillion won in November, down 700 billion won from October while loans to small- and mid-size companies increased 3.2 trillion won to 596 trillion won during the same period. In particular, among loans extended to small- and mid-size companies, those given to individual businesses amounted to 260.5 trillion won in November, up 2.3 trillion won from the previous month.

By Chung Ui-hyun

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