Thu, June 27, 2024 at 23:52

• 

  Kang-hoon

  • Hello, Annie.

  • Today, I have some important news regarding the financial sector.

  • The Financial Supervisory Service, along with other governmental bodies, released a survey on the loans, user volume, and interest rates of 8,597 registered lenders as of the end of last year.

  • 
• Annie

  • Interesting!

  • What were the key findings from the survey?🤔

  
• 

  Kang-hoon

  • The loan balance of registered lenders was 12.5146 trillion won at the end of last year, which is a decrease of 2.775 trillion won or 14.2% from the previous quarter.

• Annie

  • That's quite a significant drop!

  • What caused this decline?

  
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• 

  Kang-hoon

  • The decline is largely attributed to the recent closure of Afrofinancial Loan, also known as Rush & Cash, and an increase in delinquency rates.

• Annie

  • Oh, I see.

  • How have the delinquency rates changed over time?

  
• 

  Kang-hoon

  • At the end of last year, the delinquency rate for large lenders was 12.6%, which is up 1.7 percentage points from the previous quarter and 5.3 percentage points from the previous year.

• Annie

  • That's a worrying trend.

  • How about the number of loan users?

  
• 

  Kang-hoon

  • The number of loan users at the end of last year was 728,000, which is a decrease of 120,000 or 14.2% from the previous quarter.

• Annie

  • Wow, that's a big drop!

  • What about the interest rates?

  
• 

  Kang-hoon

  • The average loan interest rate was 14.0%, up 0.4 percentage points from the previous quarter.

  • However, the average interest rate on personal credit loans from large lenders has been declining since the reduction in the statutory maximum interest rate.

• Annie

  • That's a bit of a mixed bag.

  • What measures are being taken to address these issues?

  
• 

  Kang-hoon

  • To prevent illegal fraudulent financing targeting vulnerable people, the Bank of Korea plans to revise the requirements for maintaining and canceling excellent lenders.

  • They also plan to strengthen guidance on policy-sensitive financial products.

• Annie

  • That's good to hear.

  • What about illegal activities by lending companies?

  
• 

  Kang-hoon

  • The authorities plan to intensively check illegal activities and strictly sanction violations.

  • They will also support lawsuits to invalidate illegal lending contracts and help victims recover quickly.

• Annie

  • It sounds like they are taking this very seriously.

  • What else are they planning?

  
• 

  Kang-hoon

  • They will strengthen preliminary education through meetings for all lenders to ensure the smooth implementation of the Personal Debtor Protection Act.

• Annie

  • That's a comprehensive approach.

  • So, overall, would you say this news is good or bad for the market?

  
• 

  Kang-hoon

  • In the short term, this news is quite negative.

  • The decline in loan balances and the increase in delinquency rates indicate financial instability.

  • 

  • This could lead to tighter credit conditions and reduced consumer spending, which are not favorable for the market.

• Annie

  • I see.

  • Thank you for the detailed explanation, Kang-hoon.

  • This helps a lot with understanding the current financial landscape.😊

  
• 

  Kang-hoon

  • Upon comprehensive consideration, this news is perceived as a 😱Bearish.