Second financial sector's low-income loans 'explosion'...Increasing Demand for Vulnerable Groups

Credit loans and cash services in the second financial sector, which ordinary people seek when they need urgent money, were estimated to have soared by more than 1.5 trillion won last month alone.

Financial authorities explained that the amount of credit loans supplied from the second financial sector has exploded, which seems to have far exceeded the appropriate size, and that they will demand the submission of loan targets this month and next month.

It is the first time in three years and three months that other loans, such as credit loans and credit card loans in the second financial sector, have increased by more than 1.5 trillion won a month since July 2021, when Kakao Bank and other public offering shares were subscribed.

Analysts say the increase in loans is due to banks reducing the size of household loans and increasing demand from ordinary people and vulnerable groups due to the worsening economy.

A high-ranking official of the financial authorities explained that even if real estate-related loans are reduced, it is desirable to provide loans such as emergency funds for the vulnerable class within income standards.