As the number of lend companies, which serve as the 'final bastion' of the institutional finance sector, has decreased, the number of users has also shown a decline. Although funding expenses have increased due to high interest rates, the profitability has worsened due to the legal maximum interest rate (20% per annum) regulation, leading many lend companies to shut down. Even the remaining lend companies are not increasing their loans.
According to the 'lend industry status survey' released on the 29th by the Financial Supervisory Service, as of the end of last year, the number of lend companies was 8,182, a decrease of 255 from the end of June last year (8,437). The number of lend companies, which was 8,771 at the end of June 2023, decreased by over 600 in just one and a half years.
The number of users of lend companies is 708,000, which is a decrease of 6,000 compared to the end of June last year. The number of users, which was 989,000 at the end of 2022, has sharply dropped by 28% over two years.
In contrast, the loan balance as of the end of last year stood at 12.3348 trillion won, an increase of 1.243 billion won (1.0%) during the same period. After plummeting from 15.9 trillion won at the end of 2022 to 12.5 trillion won at the end of 2023, the loan balance has continued to decrease, showing a slight increase. The FSS explained, 'The increase in collateral loans from small and medium-sized lend companies has led to a rise in the loan balance.'
The delinquency rate for large lend companies with assets of over 10 billion won is 12.1%, down 1.0 percentage points from 13.1% at the end of June last year. The delinquency rate for lend companies spiked from 6.1% at the end of 2021 to 7.3% at the end of 2022, then to 12.6% at the end of 2023, and hit 13.1% at the end of June last year, the highest since delinquency rate tracking began in 2010.
The FSS noted, 'We will closely monitor the credit supply status of low-credit borrowers in the lending industry, while strengthening checks on unhealthy business practices by lend companies, such as illegal debt collection.'