Household Borrowing Growth Slows in South Korea Amid Tight Lending Rules.

Seoul: Household loans extended by South Korean banks rose for a seventh consecutive month in October, though the growth noticeably slowed due to stricter lending regulations, according to central bank data released on Monday. The outstanding household loans stood at 1,139.5 trillion won (US$816.79 billion) by the end of October, marking an increase of 3.9 trillion won from the previous month, based on data from the Bank of Korea (BOK).According to Yonhap News Agency, the figures indicate a deceleration from September's 5.6 trillion won increase. Home-backed loans amounted to 900.3 trillion won at the end of October, reflecting a 3.6 trillion won rise from the prior month. This, too, shows a slowdown from the 6.1 trillion won increase observed in September. The slowdown in growth can be attributed to financial authorities pressuring major lenders to implement tighter lending restrictions to manage the growing household debt and control rising home prices.In August, household borrowing experienced its larg est increase in over three years, driven by a record surge in mortgage demand as housing prices rose sharply in Seoul and surrounding areas. Unsecured or other types of loans provided by banks to households increased by 300 billion won in September, reaching 238.1 trillion won.Corporate loans showed a more significant rise, gaining 8.1 trillion won from the previous month to reach 1,324.3 trillion won in October, which is a steeper increase compared to the 4.3 trillion won rise in the preceding month, as per the data.Household loans extended by all financial institutions saw a 6.6 trillion won increase in the last month, an acceleration from the 5.3 trillion won growth in the previous month, as borrowers turned to nonbank financial entities. Notably, household loans provided by the nonbanking sector increased by 2.7 trillion won, marking the sharpest rise in nearly three years.The financial watchdog has announced plans to request nonbanking institutions, such as credit unions, to formulate strategies th is year to address the escalating household debts.