“My cell phone is about to be disconnected, please give me $100,” a housewife cries.

“I’m a housewife and I’m paying off my existing loan of 40,000,000 won to the Credit Recovery Committee. My cell phone is about to be canceled, so I really need even 1 million won today. I will pay it back no matter what.”

This is a request for an emergency loan from a housewife on an online loan brokerage platform at dawn on the 5th.

She was worried about being disconnected as her cell phone bill was nearly five months overdue, a loan broker commented.

[Photo Credit = Captured from an internet loan brokerage platform].
Payday loan inquiries are frequently posted on online loan brokerage platforms, which are mainly populated by lenders and loan brokers먹튀검증. Interest rates can be as high as 20% per annum for legitimate loans. If you borrow 1 million won, you will pay 200,000 won in interest for one year.

It seems that many people are knocking on the door because they are unable to borrow from the institutional financial system, including banks and secondary financial institutions, or are unaware that they can borrow from the microfinance system.

If you look at the main contents, you can see ‘I’m looking for 30 office workers’, ‘I’m looking for 40’, ‘I’ll spend 100 and pay back 130 in a week’, ‘I’m borrowing 200. I’ll pay you back 250 in 4 days,” and other desperate messages.

This morning, there were more than 60 such inquiries in one hour. The online lending brokerage platform alone has received more than 1,800 loan inquiries so far this month.

Loan inquiries have come from office workers, housewives, students, and even soldiers about to deploy.

“I’m a soldier with nine days left to serve. I need about 2 million won, but I don’t care if it’s more, just tell me where it’s really possible. My existing loan is about 10 million won,” it reads.

While the demand for money is steady, the market has shrunk significantly. Lending practices have also shifted from a credit-based market to one that requires collateral.

Typically, the loan market, which is mainly used by low-credit and poor people, is known to have a loan approval rate of around 10%. This means that for every 10 people who apply for a loan, 9 will be rejected.

In addition, some of the largest companies have virtually shut down, not accepting new loans.

Add to this the practice of requiring collateral in the wake of the cut in the prime rate, and the threshold for lending is high. When the statutory maximum interest rate was high, lenders offset the risk of default on loans to low-income borrowers with high interest rates, but the interest rate environment has changed, making this practice unprofitable.

According to statistics from the Financial Supervisory Service, as of the end of June last year, the loan balance of lenders was 15.87 trillion won, of which credit loans accounted for 7.32 trillion won (46.2%) and secured loans accounted for 8.54 trillion won (53.8%). The share of secured loans overtook the share of credit loans at the end of June 2021, and the trend has continued to this day.

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