AJP Factbox: Poor Koreans rely on borrowing for living costs
SEOUL, November 2 (AJP) —Living expenses accounted for nearly half — 45.3 percent — of credit borrowing among South Korean households in the lowest asset quintile in 2025, government data showed Monday.
The share was the highest since the series began in 2017, according to the Korean Statistical Information Service (KOSIS), run by the Ministry of Data and Statistics (MODS).
It rose from 44.3 percent in 2024 and 33.4 percent in 2017, underscoring the growing role of borrowing to meet everyday costs among households with the fewest assets.
The share fell steadily as household assets increased: to 32.5 percent in the second quintile, 27.3 percent in the third, 23.1 percent in the fourth and 15.1 percent among the wealthiest fifth.
Business financing followed the opposite pattern. It accounted for 29.7 percent of credit borrowing in the fourth asset quintile and 34.0 percent in the top quintile, making it the largest borrowing purpose in both groups.
The divide was also evident when households were grouped by income.
Living expenses accounted for 38.2 percent of credit borrowing among households in the lowest income quintile, up from 34.5 percent a year earlier and the highest since the series began.
The share also reached a record 32.2 percent in the second income quintile. From the third through fifth quintiles, business financing outweighed living expenses as a borrowing purpose.
The figures come from the 2025 Household Finance and Welfare Survey, jointly compiled by MODS, the Bank of Korea and the Financial Supervisory Service. Assets and debts were measured as of the end of March 2025.
The growing share of borrowing for living expenses among households with fewer resources came as credit borrowing declined overall. The proportion of households with credit loans fell 2.1 percentage points from a year earlier to 19.5 percent, while the average credit loan balance dropped 11.9 percent.
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