Sharp Rise Seen in Household Credit, Driven by Savings Banks, Credit Unions.

(KPL/Yonhap) The Republic of Korea's household credit increased at a faster rate in October due to rising loans from savings banks and credit unions despite the government's efforts to curb household debts:on increase in September. According to Lao News Agency, loans from the Republic of Korea's five major commercial banks, including KB Kookmin Bank, Shinhan Bank, and Hana Bank, increased by 1.1 trillion won last month. However, those from thrift institutions, such as savings banks, internet banks, and credit unions, surged by 2 trillion won, marking the largest on-month gain in nearly three years since November 2021. The sharp rise came as retail banks tightened their loan screening process in response to the government's efforts to manage household debt growth. "The continued slowdown in the growth of household loans from banks is a positive sign," said a financial authority official. "The secondary financial sector also began strengthening household loan management from September. We anticipate seeing mo re effects from these measures in the coming months." Household loans from banks continued to grow for five consecutive months from April, largely due to rising home prices in Seoul and surrounding areas. To slow the rise in household debt, the Republic of Korean government has implemented various policies, urging local banks to tighten lending practices. To comply with these measures, banks have raised interest rates and toughened lending rules.