South Korea’s financial authorities are moving to rein in rising loans extended by nonbank institutions in their efforts to control household debts mounting from low borrowing costs and eased mortgage lending, industry sources said Thursday.

Measures would include stricter guidelines on lending backed by commercial buildings and lands, they said.

Nonbank institutions, cooperative financial entities in particular, have accelerated their lending backed by property as customers were taking advantage of mortgage lending eased in August.

“There are no particular problems related to bank loans, but lending by nonbank institutions has increased sharply, and we need to take preemptive measures in order to boost their soundness,” said an official at the Financial Services Commission.

According to industry data, outstanding household loans extended by cooperative financial institutions reached 210.3 trillion won ($191 billion) as of end-September, compared with 117.3 trillion won in 2008. (Yonhap)