Household loans offered by South Korean depository institutions rose in April, despite ongoing government efforts to curb private debt. the central bank said Wednesday,

Household lending by local banks and non-bank institutions totaled 639.58 trillion won ($541.09 billion) as of the end of April, up 2.46 trillion won from the preceding month, according to the Bank of Korea.

The monthly total is the second highest after 639.60 trillion won tallied in December 2011. The gains also come after loans dipped by around 100 billion won in March from the previous month.

The central bank said the increase was fueled by a rise in loans extended by both banks and non-bank institutions, and money loaned to farmers for spring planting.

The increase comes as the South Korean government attempts to control the rise in household credit out of concern that heavy indebtedness in the private sector will squeeze consumer spending and slow economic recovery.

The BOK report also showed banks’ household loans, including home-backed lending, rising 1.3 billion won on-month to 454.46 trillion won as of the end of April, while total household loans from non-bank institutions moved up 1.1 trillion won to 185.12 trillion won in the same period.

Of the loans extended by banks, housing loans went up by 1.0 trillion won to 310.47 trillion won with credit loans gaining by 300 billion won to 143.99 trillion won.

The BOK froze the key interest rate at 3.25 percent for the 11th straight month in May due to uncertainties in the external economy. 

(Yonhap News)