[THE INVESTOR] Peer-to-peer loans in Korea rose nearly 7.3 percent in August from a month earlier with their delinquency rate remaining in the upper 4 percent range, a trade body said on Sept. 17.
Outstanding P2P loans extended by 60 member companies stood at 2.5 trillion won (US$2.22 billion) as of the end of August, up 7.29 percent from the previous month, according to the Korea P2P Finance Association.
P2P lending refers to a new type of loan extended to individuals or businesses through social network services and the internet, covering a wide range of services, including loans to startups and self-employed businessmen.
Property-backed loans accounted for the lion’s share with 888.5 billion won, followed by project financing with 763.1 billion won.
Their average lending rate came to 13.9 percent, and delinquency rate stood at 4.87 percent as of end-August, up 0.49 percentage point from the prior month and remaining in the 4 percent band for the third consecutive month.
Korea’s P2P loans had been on the rise between January last year and April 2018 before slowing down during the previous three months as major lenders withdrew from the association. The chief of a large P2P lender, which bolted from the association, has been detained on charges of fraud.
Against such a backdrop, the association has come up with a set of self-regulatory measures in a bid to make the P2P lending market more transparent and cleaner. “The steps are expected to help the P2P market gain healthy growth momentum,” a ranking association official said.
By Song Seung-hyun and newswires (email@example.com)