Monday, April 7th, 2014
SEOUL, KOREA - Last year, the average level of debt held by self-employed families was in excess of 100 million won, almost double that of the families living on salary income of 51.7 million won. Hyundai Economic Research Institute said on April 6 in a report, "Unlike salaried workers who have a relatively stable stream of income, self-employed households are highly sensitive to economic fluctuations in their income levels, with attendant ability to pay back debts."
The report, based on data compiled by the National Statistical Office, estimated that the share of household debt balance held by self-employed households last year was 43.6 percent even though their share in the total household number was 23.7 percent.
Of the total households who have taken out loans last year, those receiving salaried income were 6.81 million while those self-employed were 3.03 million. Loans taken out by the self-employed are different from those borrowed under a corporate name. The average interest payment cost of the self-employed in 2013 was 5.26 million won, up 1.7 percent from the previous year's 5.17 million won.
The main reason for the higher debt, self-employed households said it was because of higher living expenses (31.1%) and higher working capital requirements (23.6%). For salaried income families, it was living expenses (35.7%) and educational costs (26.4%). The average income of the self-employed has declined to 43.79 million won in 2013 from 44.25 million won in 2012. During the same period, that for salaried income families has increased to 47.07 million won from 45.17 million won.