Business Debt Soars over W50 Trillion

  • By Kim Eun-jung

    June 03, 2020 12:11

    Many companies barely survived for the first three months of this year amid the coronavirus epidemic by taking out loans of more than W50 trillion (US$1=W1,223).

    According to the Bank of Korea data on Tuesday, the outstanding debt by companies and self-employed businesses stood at W1,259.2 trillion as of the end of the first quarter, up W51.4 trillion from a quarter earlier and an all-time high.

    In comparison, the balance rose only W24.1 trillion in the previous quarter and W19.6 trillion in the first quarter of last year.

    The largest proportion or 66 percent of the W51.4 trillion was borrowed by small businesses in the wholesale and retail trade and hospitality. Manufacturers borrowed W14.8 trillion, accounting for 29 percent.

    Under normal circumstances, companies borrow to make investments, but this time they merely took out loans to tide them over the coronavirus crisis.

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