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Many small business owners in South Korea identify themselves with cash-strapped characters from the wildly popular Netflix (NFLX.O) drama “Squid Game,” desperate for a chance to win $38 million, exposing a debt trap. do which is much more familiar.

Nearing retirement at the age of 58, Yoo Hee-sook pays off his debt long ago, but still receives calls from collection agencies threatening to confiscate his bank accounts, as the loans are secured and were sold to investors without their knowledge.


“In Korea, once you become a credit delinquent, it’s like the end of the world,” said Yu, who took loans over the course of 13 years for small jobs like writing for film magazines. was in the process of paying. A film that flopped in 2002.

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Like the 456 game show contestants of “Squid Game”, Yu said, “I only wanted opportunities to pay off debt, but banks wouldn’t let you make money.”

While foreigners may associate South Korea with boyband BTS and sleek Samsung smartphones, the drama points to a dark side of rising personal borrowing, the highest suicide rate among advanced nations, and the rarity of getting out of debt.

Record home borrowing is fueling private investment and housing development, but forgiving social customs about loans often blur the line between personal and business loans, placing a burden on those running small businesses.

Personal bankruptcy hit a five-year high of 50,379 last year, court filings show.

Data from Korea Credit Information Services shows that the proportion of those who lag behind in more than one type of personal loan payment has reached 55.47% as of June, up from 48% in 2017.

“If Donald Trump had been Korean, he might not have been president, having gone bankrupt multiple times,” said a lawyer in Seoul specializing in personal bankruptcy.

“In the United States, corporate debt is more different from personal loans.”

An inadequate social safety net for small entrepreneurs and the lack of a rehabilitation program for failures pose risks that can frustrate some South Koreans, and banks often impose a five-year limit for destroying bankruptcy records. ignore.

“Due to traditional practices in the banking industry, business owners in South Korea face a high likelihood of incurring debt from the business they run,” said bankruptcy judge Ahn Byung-wook.

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Banks often demand that business owners stand as joint surety for the firm’s lending, a practice the government banned in 2018 for public financial institutions, though three owners told Reuters that some remained providers. live.

Applicants for business loans who have a poor credit rating or a history of default require a guarantee from state-run financial institutions in South Korea.

“Culturally, unsuccessful entrepreneurs are socially stigmatized, so it’s hard to start, because people don’t trust them,” said Ahn, who spent four years in the Seoul bankruptcy court.

“On top of this, those who file personal bankruptcy face a long list of restrictions on employment.”

South Korea’s number of self-employed ranks among the highest in the world, making up a quarter of the job market, making it vulnerable to recession. A central bank study in 2017 showed that only 38% of such businesses survive three years.

Yet, as economic prospects dwindle, South Koreans are chasing less good jobs amid rising home prices, many betting that speculation is the only route to wealth, and stocks And have taken more debt than ever before to buy other properties.

Domestic borrowing equals GDP at a record high of about 1,806 trillion won ($1.54 trillion) in the June quarter.

“The government encourages startups, but they don’t take care of failing businesses,” said 40-year-old entrepreneur Ryu Kwang-han.

“How is it different from ‘Squid Game’ if there’s no second chance?”

The world’s largest streaming service, the global sensation has been watched by 142 million homes since its September 17 debut, helping Netflix add 4.38 million subscribers.