SEOUL – The financial health of South Korea’s self-employed individuals is deteriorating rapidly, with bank loan delinquency rates nearly doubling over the past ten years. According to data submitted by the Financial Supervisory Service to Representative Heo Young’s office on Thursday, the delinquency rate for self-employed won-denominated loans reached 0.63% at the end of last year.

A Four-Year Upward Surge
This figure represents a significant jump from the 0.34% recorded in December 2015. The trend shows a sharp "V-shaped" trajectory; after bottoming out at 0.16% in 2021 during the height of liquidity injection, the rate has climbed steadily for four consecutive years: 0.26% in 2022, 0.48% in 2023, and 0.60% in 2024.

In stark contrast, large enterprises have seen their delinquency rates plummet. From a high of 0.92% in 2015 during a period of aggressive corporate restructuring, the rate for big business fell to a mere 0.12% by the end of last year.

The "Triple Threat": Inflation, Interest Rates, and Geopolitics
Financial authorities attribute this rise to a "perfect storm" of high inflation and sustained high interest rates, which have delayed the recovery of the real economy. While the absolute level of delinquency is not yet considered critical, officials expressed concern over the persistent upward trend.

"The delayed economic recovery reflected in rising delinquency rates is not a good signal," a financial authority official stated. "However, the banking sector currently has enough stamina to absorb these losses due to increased earnings."

Experts warn of further volatility. Kang Sung-jin, an economics professor at Korea University, noted that the current export-led growth—driven primarily by semiconductors—has yet to trickle down to domestic consumption. He also highlighted the recent U.S.-Iran conflict as a major external variable that could destabilize the market further.

Moving Beyond Debt Relief
As the burden grows, some analysts are calling for a shift in government policy. Rather than temporary liquidity injections or moral hazard-inducing debt cancellations, experts suggest focusing on long-term competitiveness.

"Government support must be based on objective criteria that market participants can agree upon to ensure fairness," said Kim In, a researcher at BNK Investment & Securities. "We need to focus on strengthening the fundamental competitiveness of the self-employed rather than relying on one-off financial aid."

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