South Korea's household debt has been on the rise in recent years as people borrowed money from banks and other financial companies to buy homes, and invest in real estate and businesses.

South Korea's outstanding household credit -- which is composed of household loans and credit card spending -- came to 1,344.3 trillion won ($1.19 trillion) at the end of 2016, up 11.7 percent from a year earlier.

The BOK also said the proportion of South Korea's household debt to disposable income came to 169 percent, compared with an average of 129.2 percent for 25 out of 35 member states of the OECD.

Increased household debt has weighed on domestic consumption.

Of those households that took out financial loans, 70.1 percent said paying back both principal and interest is burdensome, government data released last year said.

For people feeling the weight of servicing the principal, as well as making interest payments, 74.5 percent said they cut their savings, investments and spending, the data showed. (Yonhap)