South Korea’s corporate and household borrowings from banks showed the biggest-ever monthly surge in March, underscoring the livelihood threat to both individuals and corporations from an unprecedented epidemic outbreak.

According to the data released by the Bank of Korea (BOK) on Wednesday, the country’s outstanding loans extended by banks to the corporate sector totaled 901.4 trillion won ($741.6 billion) in March, adding 18.7 trillion won from the previous month. The monthly gain was the largest since June 2009 when data became available.

Borrowings from small- and mid-sized firms increased by 8 trillion won, with loans to private business owners rising 3.8 trillion won.

Even loans extended to large companies shot up by 10.7 trillion won as they also turned to bank lending to keep their business afloat amid a sharp fall in revenue and depressed stock and debt markets. Unlike in the normal times, companies did not seek long-term loan for capital investment, but to sustain operations.

Seoul National University professor Ahn Dong-hyun observed that the sign of companies seeking out loans suggest they are running short on cash due to disruptions in their sales and output.

The country’s household borrowings extended by banks also grew by 9.6 trillion won on month to reach 910.9 trillion won in March. It was also the largest monthly gain for the country’s household loans since data collection from 2004.

Mortgage-backed loans swelled by 6.3 trillion won. The growth slowed from the 7.8 trillion won monthly gain in February, but still was the second highest since April 2015.

Transactions for low- to mid-priced homes continued to grow last month in Seoul and its surrounding areas despite the government’s tight real estate regulations launched on Dec. 16, which led to a faster-than-expected mortgage-backed lending, an official from the BOK said.

Personal credit loans rose 3.3 trillion won in March as not only households but also self-employed people and merchants sought bank lending to sustain their livelihood, according to market experts.

By Song Min-geun, Kim Hyung-joo and Choi Mira

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]