Jeju's Loan Delinquency Rate Hits National High Amid Surge in High-Interest Secondary Lender Use

As financial authorities tighten household debt management, making it harder to borrow from prime banks (Tier 1 financial institutions), Jeju residents are increasingly turning to non-bank financial institutions (Tier 2 financial institutions) for loans, despite the burden of high interest rates. This trend is raising concerns that it could exacerbate risks across the entire regional economy.

In February, while the total increase in loans in the Jeju region was 18.9 billion won, the growth in Tier 1 loans was only 7.1 billion won. In contrast, Tier 2 institutions saw an increase of 11.8 billion won. Specifically, mortgage loans from Tier 2 institutions grew by 39.4 billion won in February alone.

As of the end of February, the delinquency rate for savings banks in the Jeju region stood at 1.13%, significantly exceeding the national average of 0.62%. The delinquency rate for household loans was 1.36%, while the rate for corporate loans was 1.05%.

The Bank of Korea's Jeju Branch will continue to monitor loan flows, focusing on non-bank mortgage lending.