The underworld of debt collection in South Korea : NPR

in the show squid game, the poor fight to death for money to pay their debts. NPR’s Ari Shapiro interviews Los Angeles Time journalist Victoria Kim on the underworld of South Korean loan sharks.



ARI SHAPIRO, HOST:

The hit Netflix show “Squid Game” is a dystopian fantasy where the poor are pitted against each other in a series of childhood games with a life or death outcome.

(SOUND CLIP FROM A TV SHOW, “SQUID GAME”)

UNIDENTIFIED SINGER: (Singing in a language other than English).

SHAPIRO: All for the purpose of paying off their crippling debts. And debt is a real problem in South Korea, where an underworld of loan sharks and debt collectors fuels an economy of desperation.

Victoria Kim spoke about it for the LA Times and joins us from Seoul. Hello everyone.

VICTORIA KIM, BYLINE: Hello.

SHAPIRO: Tell us about the man who opens your article. He’s a cafe owner who’s been sucked into this world.

KIM: Yeah, it’s a gentleman by the name of Mr. Park that I interviewed about a loan 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 exhausted all other options to borrow money. And he found out thanks to a business card that was thrown at his feet from a motorbike speeding down the street.

SHAPIRO: That detail is so striking – a motorbike zooms by and a business card is thrown at his feet.

Kim: Yeah. And in some ways, it also mirrors the show and the calling card that opens things up. But the money was hand delivered to him in cash, and these gentlemen with tattooed sleeves and shaved heads started showing up at his door every day to collect the debt. And interest rates were about 200% per annum, about 10 times the legal limit here in South Korea.

SHAPIRO: Now predatory lending and aggressive debt collectors exist in many places, including the United States, but it seems to be a particularly prevalent problem in South Korea. What is its distribution?

KIM: It’s hard to say exactly how big it is because it’s an illegal trade. But it definitely seems to have increased lately, with the economic instability due to the COVID-19 pandemic. It’s a long-standing problem in South Korea. And the reputation is that these lenders come from the underworld, and advertisements for these types of loans can easily be seen on subway doors, stuck on bus benches, every day on the street.

SHAPIRO: You write that according to the Bank of Korea, citizens in their thirties have borrowed on average more than 260% of their income. I mean, it’s not all about these underground money lenders. But still, it’s a shocking number.

KIM: It’s actually the legal lending that’s happened, and it’s really increased over the last year. There’s been a really big rise in housing prices and a lot of economic insecurity that’s really made a lot of young adults really feel like they don’t have a strong economic future in traditional employment, like their parents did, and they take out these loans to bet on things like the stock market or cryptocurrency.

SHAPIRO: And what does 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 even though it’s an obscure industry that’s illegal, for him it was really a last resort, and it was a lifesaver. It has helped him keep his business afloat and his employees working during the pandemic. He doesn’t know how long he can go on, but for him – for him, it was an option that the South Korean economic system didn’t otherwise offer him and that he really needed.

SHAPIRO: Wow. How do you balance this scary whirlwind of debt that people get sucked into with this man telling you that, for him, it 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 are, indeed, blind spots in the social safety net. And for many people, this is the only option left to them.

SHAPIRO: Victoria Kim is an LA Times staff writer based in Seoul. Thank you so much.

Kim: Thank you.

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Bonny J. Streater