By Lee Hyo-sik
Staff Reporter


The number of credit delinquents has declined this year as more blacklisted people are paying off their debts, helped by various government-sponsored debt workout programs.

The figure stood at 3.3 million as of the end of June, down 315,000 from the end of last year, according to the financial industry sources on Thursday. But the number is still higher than the normal range of 2.8 to 3 million people.

Credit defaulters were those behind in credit card, bank loan and other financial payments of over 300,000 won ($270) for more than three months.

The number of credit delinquents has continued to draw a downward curb since April 2004 when the number hit an all-time high of 3.8 million, as government and financial institutions have implemented various measures, including the debt workout program, to help people resume normal financial activities.

Once blacklisted, credit defaulters face difficulties getting bank loans and credit cards as financial services companies utilizes the list.

A large number of Koreans became credit delinquents, following the burst of the credit card bubble in late 2002, as they financed their spending spree on credit cards issued recklessly by the card issuers from 1999 through 2002.

The government also played a large role in creating a huge number of defaulters as it encouraged card issuers and other financial services companies to extend credit to consumers to boost the domestic economy following the 1997-1998 Asian financial crisis.

The Korea Federation of Banks (KFB) compiled and released the data on credit delinquents, but stopped doing it in April when the government scrapped the credit defaulter blacklisting system.

The KFB official said that the number of defaulters fell this year as people increasingly utilized the government-run debt workout program to get off the blacklist.

According to the KFB, about 60,000 to 70,00 people became new credit delinquents each month on average this year, down from a monthly average of 100,000 last year.

But still a large number of Koreans are living in poverty amid the prolonged sluggish domestic economy.

More than five million Koreans are living in poverty, with one in every 10 people on an income below minimum living expenses.

According to a the Ministry of Health and Welfare, the number of people below the poverty line was estimated to surpass the five-million mark as of the end of June, up from 4.6 million in 2003.

The increase is attributable to the widening gap between the rich and the poor, aggravated by the continuing economic slump, the ministry said.

The poor include those who earn less than the minimum living costs and those who make less than 1.36 million won per month.

The minimum living expenses were determined to be 908,000 won per month for a three-member household and 1.14 million won for a four-member household.

leehs@koreatimes.co.kr