00:03korea's small business borrowers are falling further behind on their loans and life insurers
00:08are watching policyholders borrow their way through the squeeze delinquency rates at four
00:15of korea's five biggest banks rose in just six months life insurance policy loans just hit 42
00:23trillion won and a tax change now squeezing convenience stores and restaurants adds
00:29another layer of pressure it's wednesday august 12th let's break down what's happening in korea's
00:36financial sector rising interest costs and softer consumer spending have made it harder for small
00:43business owners to service their loans at the same time households under financial strain are
00:49increasingly tapping policy loans against their life insurance policies instead of going to banks
00:55layered on top a cut to value-added tax deductions is squeezing cash flow at convenience stores
01:02restaurants and lodging businesses here's what the numbers show delinquency rates rose at four of
01:09korea's five largest banks between December and June with nomhyeop's small business default rate
01:15climbing from 0.66 to 0.71 percent 31.1 billion dollars 42 trillion won is now out in policy
01:28loans that
01:28life insurers have extended to korean households up 2 trillion won in just six months 556 million
01:37750 billion won that's the added tax bill landing on roughly 300 000 self-employed Koreans this year
01:46with convenience store restaurant and lodging owners hit hardest small business credit card loan rates
01:53still eased from 5.354 percent in april to 5.288 percent in july so what does this mean for
02:02financial
02:03institutions and korean households earlier we said delinquency rates are rising at korea's biggest
02:10banks here's what that actually means for you credit risk in the small business loan book is building
02:16even as headline rates ease which raises the odds of tighter underwriting ahead foreign financial
02:23institutions with korean operations should watch how regulators respond especially as households lean
02:29harder on insurance-backed loans instead of bank credit the vat change adds another pressure point
02:36that could show up in loan performance data before it shows up in official growth numbers that's today's
02:42ai prism finance daily this episode was produced with ai assistance based on sole economic daily reporting
02:50and reviewed by a human editor ai prism is a juan ifra award-winning series we'll be back tomorrow
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