The Underworld of Debt Collection in South Korea: NPR
ARI SHAPIRO, HTE:
The hit Netflix show “Squid Game” is a dystopian fantasy where the poor are pitted against each other in a childhood game series with a life or death outcome.
(SOUNDBITE FROM THE TV SHOW, “SQUID GAME”)
UNIDENTIFIED SINGER: (Singing in a language other than English).
SHAPIRO: All for the purpose of paying off their crushing debts. And debt is a real problem in South Korea, where an underground world of usurers and debt collectors is fueling an economy of desperation.
Victoria Kim spoke about it for the LA Times and is joining us from Seoul. Hi.
VICTORIA KIM, BYLINE: Hello.
SHAPIRO: Tell us about the man who opens your article. He’s a cafe owner who was sucked into this world.
KIM: Yeah, it’s a gentleman named Mr. Park that I interviewed about a lending experience he had over the last three years or so. And it works very differently from a traditional bank loan. He turned to it when he had exhausted all other options in terms of where he could borrow money. And he discovered it thanks to a business card that was thrown at his feet from a motorbike speeding down the street.
SHAPIRO: This detail is so vivid – right, a motorbike is speeding by and a business card is thrown at its feet.
KIM: Yeah. And in some ways, it also reflects the spectacle and the business card openings. But the money was handed over to him in cash, and these gentlemen with tattooed sleeves and shaved heads began to walk past his door every day to collect the debt. And the interest rates were around 200% per year, about 10 times the legal limit here in South Korea.
SHAPIRO: Now predatory loans and aggressive debt collectors exist in many places, including the United States, but it seems to be a particularly prevalent problem in South Korea. How widespread is it?
KIM: It’s hard to say how exactly that is because it’s an illegal business. But that definitely seems to have increased in recent times, with economic instability due to the COVID-19 pandemic. It is a long-standing problem in South Korea. And the reputation is that these lenders are from the underworld, and the advertisements for these types of loans can really be seen on the doors of the subway, glued to the benches of the buses, just everyday on the streets.
SHAPIRO: You write that according to the Bank of Korea, citizens in their 30s have borrowed on average over 260% of their income. I mean, that’s not all about these underground moneylenders. But still, it’s a shocking number.
KIM: It’s actually the legal loans that have happened, and they’ve really increased over the last year. There was a spike in house prices and a lot of economic insecurity that really made a lot of young adults really feel like they didn’t have a solid economic future in a traditional job like their parents did. , and that they take out these loans to bet on things like the stock market or cryptocurrency.
SHAPIRO: And what did that mean for Mr. Park, the man who opens your story and has been dealing with this for three years?
KIM: Mr. Park tells me that while it’s a shadow industry that’s illegal, for him it was really a last resort, and it was a lifeline. This has helped him keep his business afloat and his employees working during the pandemic. He doesn’t know how long he will be able to continue, but for him – for him, it was an option that the South Korean economic system did not offer him otherwise that he really needed.
SHAPIRO: Whoa. How do you balance this frightening whirlwind of debt that people are sucked into with this man telling you that for him was a lifeline?
KIM: I think that really lays bare South Korea’s economic problems. It is certainly not unique to South Korea that there really are blind spots in the social safety net. And for many people, it’s the only option left for them.
SHAPIRO: Victoria Kim is an LA Times writer based in Seoul. Thank you so much.
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