Wednesday, April 8, 2020
Approximately 1.6 Million South Korean Households Regarded as Marginal Ones
Marginal Households
Approximately 1.6 Million South Korean Households Regarded as Marginal Ones
  • By Jung Suk-yee
  • March 21, 2016, 02:30
Share articles

14.8% of Korea’s total households suffer from financial liabilities exceeding financial assets.
14.8% of Korea’s total households suffer from financial liabilities exceeding financial assets.

 

The Hyundai Research Institute announced on March 20 that the number of marginal households totaled 1.583 million in South Korea last year, equivalent to 14.8% of the total households. The institute defined the marginal households as those where financial liabilities exceed financial assets and principal and interest repayments exceed 40% of disposable incomes.

According to the institute, those households recorded an average debt service ratio (DSR) of 104.7% with the average annual disposable income and debt repayment at 39.73 million won and 41.6 million won, respectively. On the contrary, the other households’ average DSR was 20.2% with the respective amounts at 48.44 million won and 9.81 million won.

Specifically, the average DSR of the marginal households where the householders are aged 60 or older amounted to 121.6% while those headed by people in their 30s and 50s were 98.9% and 104.2%, respectively. The percentage was as high as 135% for jobless marginal households and 125.2% for those in the lowest income group while it was 78.9%, 88.5%, 109.8% and 109.0% for those in the second-, third-, fourth- and fifth-lowest income groups, respectively.

The marginal households had an average financial debt of 150.43 million won and an average financial asset of 57.79 million won. In contrast, the other households’ financial liabilities and assets were 63.01 million won and 97.04 million won, respectively. Under the circumstances, domestic consumption is being affected. It is estimated that 73.6% of the marginal households are reducing their consumption because of the debt repayment burden.