It analyzed data compiled by Statistics Korea.

Among the country's households with financial debts, the proportion of marginal ones rose from 14.8 percent to 16.7 percent during the period.

In particular, retirees and those in their 30s residing in Seoul or nearby Gyeonggi Province suffer heavy debt burden due to their borrowing for house purchases.

The ratio of marginal households in their 30s gained 3.8 percentage points on-year to 18 percent in 2016.

The age group here usually seeks to buy houses after marriage.

The debt-to-service ratio of the marginal households also jumped to 112.7 percent last year from 84.2 percent in 2012.

It indicates that debt payments increased far more than income levels.

Among the marginal households, 67.7 percent said they are reducing spending due to debt burden and 32.8 percent said they are incapable of paying back their debts or will be able to do so only after loans are matured.

Chung stressed the need for "tailored" policy measures to help low-income, self-employed, retired and younger people repay their debts.

"A three-angle policy is needed for low-income people: income growth, finance-related support and credit recovery through debt adjustment," he said in a related report.

Adding to the concern is the possibility of further interest rate hikes.

A stress test showed that the number of marginal households in Asia's fourth-biggest economy would rise to 1.93 million if interest rates add 3 percentage points.

The number will jump to 1.97 million if their income shrinks 10 percent with rates unchanged. (Yonhap)