Illegal loan leaflets and information are shown on the wall of a building in downtown Seoul, Wednesday. Yonhap

Amid persistently high interest rates, recent data indicates that self-employed borrowers are struggling to repay their loan principal and interest on schedule.

According to the financial industry data on Wednesday, the total amount of business loans serviced to self-employed borrowers that have been overdue for more than one month at five major banks — KB Kookmin, Shinhan, Hana, Woori and NH Nonghyup — amounted to 1.35 trillion won ($989 billion), as of the end of the first quarter of this year.

The figures show an increase of 37.4 percent, compared to the end of the first quarter of last year, when the total amount of outstanding debts for self-employed people stood at 987 billion won.

Because of the increased delinquency rates by the self-employed, the average delinquency rate across the five major banks jumped to 0.42 percent at the end of the first quarter, from 0.31 percent a year ago.

By banks, NH Nonghyup Bank saw the highest increase rate in the delinquency rates among self-employed borrowers during the past year.

The aggregated amount of business loans to the self-employed that are overdue by more than one month stood at 346 billion won at the end of the first quarter, a whopping 79.3 percent rise from 193 billion won recorded a year ago.

Due to the delinquencies, the bank's overall delinquency rates has significantly risen to 0.63 percent at the end of March, from 0.36 percent a year ago.

Similary, KB Kookmin Bank posted a 52.6 percent rise year-on-year in the amount of business loans to the self-employed that have been overdue, from 173 billion won to 264 billion won at the end of the first quarter.

Shinhan Bank, Woori Bank and Hana Bank also showed a comparable trend, each showing a 23.7 percent, 22.7 percent and 14 percent increases in the amount of the loans to the self-employed that are overdue, respectively, year-on-year.

Market watchers attributed the soaring delinquencies to the nearing maturities of loans that were first lent to small business owners during the COVID-19 pandemic.

Unlimited maturity delays in both loan principal and interest payments for the small business owners in the country ended in autumn last year, while many borrowers are still failing to keep up with repayments.

The delay of the anticipated benchmark interest rates cut, which was expected to occur as early as the first half of the year, has also played a part in placing burdens on individual business owners.

There are concerns about the potential further growth in non-performing loans, as industry insiders point out rising delinquencies among borrowers with relatively large loan amounts, such as rental business operators and hospitals.