Korean banks' lending to self-employed people have hit a record high this year, central bank data showed Sunday, prompting financial authorities to move to tighten loan screening procedures.

Outstanding bank loans to the self-employed reached 232.6 trillion won ($203.7 billion) as of end-September, accounting for 42 percent of total bank lending to small and medium enterprises, according to the data by the Bank of Korea (BOK).

In the first nine months of the year, such loans rose 23.3 trillion won, marking the highest on-year gain since 2009, when the BOK started to compile the data.

Household loans increased 51.2 trillion won over the cited period, the BOK data added.

Bank loans to the self-employed have been on the steep rise for the past five years: 13 trillion won in 2011, 15 trillion won in 2012, 17.1 trillion won in 2013 and 18.8 trillion won in 2014.

The Financial Services Commission (FSC), the financial market oversight body, and the BOK launched a joint investigation last month into the loan screening and credit standards of five local commercial banks, including Shinhan Bank and Kookmin Bank, in order to strengthen monitoring on loans to mom-and-pop stores.

"It's true that bank loans extended to self-employed businesses have risen sharply through this year," a BOK official said. "We've handled this issue relatively lightly, as the authorities have focused more on controlling household debts."

Experts call for appropriate long-term measures to ease the speedy pace of self-employed loans, citing that massive loans would undermine the financial health of banks.

"The self-employment business market has already reached a saturation point. But rising number of baby boomers are entering the market, and they are sliding into debt," said Kim Kwang-seok from Hyundai Research Institute. "We have to come up with long-term plans to reorganize the industrial structure, including reducing mom-and-pop stores in the market." (Yonhap)