It is not working to put the brakes on the household loans despite the Korean government’s measures to raise the interest rates and strengthen the qualification for loans.
The increase in household loans dropped sharply to 69.1 billion won (US$ 62 million) in January this year, showing some effects of the government’s efforts to restrict the household loans, but it bounced back to 2.9 trillion won (US$2.6 billion) in February.
In particular, the household loans extended by local banks rose 10 percent in March from a year earlier due to increased mortgages.
Outstanding household loans, as of the end of March, stood at 713.9 trillion won (US$642 billion), up 2.9 trillion won (US$2.6 million) in a month. The figure also increased 65 trillion won (US$58 billion) from 649 trillion won (US$584 billion) from a year earlier, according to the Bank of Korea (BOK).
The mortgages climbed 2.6 trillion won (US$2.3 billion) month-on-month to 538.5 trillion won (US$484 billion) in March. In February, mortgages rose 2.1 trillion won (US$1.9 billion) from a month earlier.
The national outstanding household credit -- which is composed of household loans and credit card spending -- reached 1.344 quadrillion won (US$1.209 trillion) at the end of 2016, up 11.7 percent from a year earlier.
In the meantime, the outstanding corporate loans in March came to 758.5 trillion won (US$682 billion), up 200 billion won (US$180 million) from the previous month.