Loans taken by self-employed people in South Korea reached a record high in 2015, with some 20 percent of them at risk of becoming insolvent, a report showed Tuesday.

According to the report by the Hana Institute of Finance, self-employed South Koreans owed a combined 520 trillion won ($437.5 billion) to local financial institutions as of end-June.

Of the total loans, 18.5 percent were mortgages in excess of the government-imposed lending cap, known as the loan-to-value ratio that allows homebuyers to borrow up to 60 percent of their income for mortgage payments.

The number of borrowers from multiple lenders also grew to 3.44 million from 3.18 million in 2010, with the amount of their borrowing surging from 282 trillion won to 348 trillion won.

"Even more worrisome is the fact that a whopping 63.6 percent of them were found to have taken out household loans as well as corporate loans," Hana researcher Chung Hee-soo said.

"More than 3 out of 10 self-employed borrowers run real estate agencies, with 1 in 10 operating restaurants or lodging facilities, which are very susceptible to the overall economic situation," he noted.

Snowballing debts by households and self-employed people have been a prime headache for the government as their debt service burden is feared to rise down the road due to a U.S. rate increase and a protracted economic slowdown.

According to the data by the Bank of Korea, bank lending to the self-employed reached 232.6 trillion won as of end-September, accounting for 42 percent of total bank lending to small and medium enterprises. Such loans have been on the steep rise for the past five years from 13 trillion won in 2011 to 18.8 trillion won in 2014.

"It is an urgent task to come up with necessary measures to cushion the possible impact of higher borrowing costs on multiple borrowers with high default risk and financial institutions," Chung stressed. (Yonhap)