South Korea: Rising delinquency in microfinance and delivery app costs burden small businesses

South Korea is facing growing financial pressures for vulnerable populations and small business owners. Data from the Korea Inclusive Finance Agency shows that delinquency rates for loans designed to prevent illegal private financing have surged to 44.3 percent as of late September. The impact is most severe among younger borrowers, with the delinquency rate for those in their 20s and younger exceeding 50 percent.

In the service sector, a survey by the People's Solidarity for Participatory Democracy reveals that delivery app merchants are struggling with declining profits despite rising sales. Many shop owners reported that the costs of mandatory-feeling promotions and advertisements on platforms like Baedal Minjok and Coupang Eats are eroding their margins. Approximately 79.4 percent of surveyed merchants reported a decrease in net profit, often due to bearing the brunt of discount costs and high commission fees to maintain visibility on the apps.