April 25, 2024

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The number of private money lenders operating in South Korea rose 1.7 percent in the second half of last year from six months earlier, government data showed on July 1.

The number of registered private money lenders and brokers reached 8,310 as of the end of December last year, up 142 from six months earlier, according to the Financial Services Commission.

Average lending rates by private lenders stood at 19.6 percent as of the end of December last year, down from 20.6 percent six months ago, according to the FSC.

The total amount of outstanding loans was 17.3 trillion won ($14.9 billion) at the end of December last year, down 0.6 percent from six months earlier, the FSC said.

It was the first time since 2014 that outstanding loans by private lenders declined, the FSC said.

Users of private money lenders tend to be those whose credit ratings are too low to qualify for bank loans.

The number of people who borrowed money from private lenders stood at 2.21 million at the end of December last year, the FSC said.

In February last year, the government lowered the maximum legal lending rate from 27.9 percent to 24 percent.

The government plans to gradually cut the maximum interest rate that private lenders can charge to 20 percent per annum, FSC officials said.

By Ram Garikipati and newswires (ram@heraldcorp.com)