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Credit card loans soar 26% due to virus in March

(Yonhap)
(Yonhap)

Credit card loans in South Korea surged nearly 26 percent on-year in March as cash-strapped people rushed to borrow from card firms amid a prolonged coronavirus outbreak, industry data showed Wednesday.

New loans extended by seven credit card firms -- Shinhan, KB Kookmin, Woori, Hana, Samsung, Hyundai and Lotte -- came to 4.3 trillion won ($3.5 billion) last month, up 25.6 percent from a year earlier.

The figure compares with annualized increases of 1.6 percent in January and 16.6 percent in February.

Analysts said the surge came as a business slump stemming from the longstanding outbreak of COVID-19 forced self-employed or low-credit people to resort to card loans.

South Korea has been gripped by the coronavirus outbreak since the country reported its first confirmed case on Jan. 20.

Asia's fourth-largest economy has been implementing strict social distancing measures to stem the spread of the potentially deadly disease, which has made a big dent in the country's economic activity.

Financial hardships also prompted people to resort to commercial banks for signature loans. Combined unsecured loans extended by KB Kookmin and four other major banks rose by nearly 2.2 trillion won in March from a month earlier, the biggest monthly gain since January 2016.

Kakao Bank, one of the country's two internet-only banks, also posted a surge in unsecured loans. The online lender's outstanding unsecured loans came to 13.9 trillion won in March, up about 945 billion won from the prior month. (Yonhap)

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