Repay debts – Loro Dinapoli http://lorodinapoli.org/ Thu, 28 Oct 2021 23:20:16 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 http://lorodinapoli.org/wp-content/uploads/2021/07/icon-2021-07-06T154208.998-150x150.png Repay debts – Loro Dinapoli http://lorodinapoli.org/ 32 32 Credit Score and Locked Credit Effects on Loan Applications – Aviation Finance http://lorodinapoli.org/credit-score-and-locked-credit-effects-on-loan-applications-aviation-finance/ http://lorodinapoli.org/credit-score-and-locked-credit-effects-on-loan-applications-aviation-finance/#respond Thu, 28 Oct 2021 18:21:03 +0000 http://lorodinapoli.org/credit-score-and-locked-credit-effects-on-loan-applications-aviation-finance/ Credit generally does not have a significant impact on the interest rate associated with an airplane loan, although it can potentially be a blocking problem. In our experience, a person’s credit score affects the ability to obtain a loan the most if it is below 700. Generally speaking, credit score parameters belong to one of […]]]>

Credit generally does not have a significant impact on the interest rate associated with an airplane loan, although it can potentially be a blocking problem. In our experience, a person’s credit score affects the ability to obtain a loan the most if it is below 700. Generally speaking, credit score parameters belong to one of the following: the following four groups:

  • Less than 680
  • 680 to 700
  • 700 to 730
  • And more than 730

Depending on the category in which your score falls, the credit score will affect the loan in two ways: your interest rate and / or the structure of your loan.

In reality, a score of 730 is as good as a score of 800 and vice versa. It is a truism that is not widely discussed. What really matters is a credit score below 680. Trading below that is difficult.

Your credit score is part of The four Cs of credit:

* CapacityWhat is your ability to repay the loan? Do you have a job or other source of income? Have you been at your job for a while? Do you have other debts?

* CharacterAre you going to repay the loan? Have you ever used credit? Are you paying your bills on time?

* GuaranteeIf you don’t repay the loan, is there anything of value that you accept to lose?

* Capital city (accumulation)What are you worth? Do you have other assets, such as a savings account, real estate, or equity securities, that you could use to pay off debt? How liquid are these assets?

Freezing or foreclosing on your credit is a reliable way to prevent identity theft. Both have been offered by credit reporting companies for years and millions of people are taking advantage of this strategy. Remember that doing either adds time to the application process. Lenders won’t be able to withdraw your credit until you unlock or unblock your credit. Our advice is to release your credit well in advance of applying, as it may take longer than expected for all three credit bureaus to comply. And rememberif you have blocked your credit, you must go to the three credit bureaus to unblock it.

While everyone is entitled to a free credit report every year (beware of scammers), the credit report does not include a credit score. Your bank, your credit card provider, even identity protection companies like Lifelock can provide you with a free credit score.

Very good advice. Excellent rates. Helpful and responsive representatives you can trust. Three good reasons to turn to AOPA Aviation Finance when buying or refinancing an aircraft. If you need a reliable source of funding with people who are by your side, just call 800.62.PLANE (800.627.5263) or click here to request a quote.


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Nykaa IPO heavily oversubscribed by flagship investors http://lorodinapoli.org/nykaa-ipo-heavily-oversubscribed-by-flagship-investors/ http://lorodinapoli.org/nykaa-ipo-heavily-oversubscribed-by-flagship-investors/#respond Wed, 27 Oct 2021 15:09:11 +0000 http://lorodinapoli.org/nykaa-ipo-heavily-oversubscribed-by-flagship-investors/ Indian cosmetics at fashion start-up Nykaa have received offers for 40 times the number of shares it plans to sell to anchor investors in its initial public offering (IPO), a directly-informed source said on Wednesday, indicating a strong interest in the sale. Investment firm Blackrock Capital Group and asset manager Fidelity were among the major […]]]>

Indian cosmetics at fashion start-up Nykaa have received offers for 40 times the number of shares it plans to sell to anchor investors in its initial public offering (IPO), a directly-informed source said on Wednesday, indicating a strong interest in the sale.

Investment firm Blackrock Capital Group and asset manager Fidelity were among the major buyers of the 23.96 billion rupee ($ 319.68 million) sale of shares that FSN E-Commerce Ventures, the company owner of the Nykaa brand, proposed to institutional investors, the source said. refusing to be identified because the information was not public.

The sale of shares to the main investors will close later on Wednesday.

Read also | Nykaa IPO opened on October 28, price range set at Rs 1,085 to Rs 1,125 / share

Nykaa did not immediately respond to a request for comment.

FSN E-Commerce valued its IPO at Rs 1,085 to Rs 1,125 per share, giving Nykaa a valuation of up to $ 7.11 billion.

The company aims to raise nearly $ 500 million through a three-day IPO subscription from October 28 to November 1. The IPO involves issuing new shares worth up to Rs 5.25 billion and offering up to 43.1 million existing shares.

Nykaa, whose investors include private equity firm TPG, Fidelity and Indian actress Alia Bhatt, said she would use the proceeds of the IPO to set up new retail stores, fund capital spending and pay off debts.

The main book managers for the IPO include BofA Securities, Morgan Stanley, Kotak Mahindra Capital, Citigroup, ICICI Securities and JM Financial.

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Petrofac raises £ 200million to pay SFO corruption fine – Daily Business http://lorodinapoli.org/petrofac-raises-200million-to-pay-sfo-corruption-fine-daily-business/ http://lorodinapoli.org/petrofac-raises-200million-to-pay-sfo-corruption-fine-daily-business/#respond Tue, 26 Oct 2021 06:39:06 +0000 http://lorodinapoli.org/petrofac-raises-200million-to-pay-sfo-corruption-fine-daily-business/ Petrofac fined following SFO investigation Petrofac, the Aberdeen-based oil services company, is raising £ 200million ($ 275million) in a placement and public offer that will pay its recent fine for bribery offenses. The issue price of the 173.5 million new shares is 115 pence. This is a 27.2% discount from the 158p closing price on […]]]>

Petrofac fined following SFO investigation

Petrofac, the Aberdeen-based oil services company, is raising £ 200million ($ 275million) in a placement and public offer that will pay its recent fine for bribery offenses.

The issue price of the 173.5 million new shares is 115 pence. This is a 27.2% discount from the 158p closing price on October 25th.

The capital increase is part of a larger refinancing plan announced today, including a $ 500 million bridge financing facility that is expected to be replaced or refinanced through a government bond issue, which is expected to be replaced or refinanced through a government bond issue. be launched later today. There is also a new $ 180 million revolving credit facility.

The proceeds of the capital increase will be used, alongside the refinancing plan and available cash reserves, to pay the penalty of $ 106 million (£ 77 million) imposed as part of the SFO investigation and to repay existing debts.

Earlier this month, the company admitted it had failed to prevent former executives from paying bribes to win contracts in the Middle East.

Ayman Asfari

Ayman Asfari: invest $ 38 million in fundraising

He said today’s actions will lengthen Petrofac’s debt maturities and strengthen the company’s platform to execute its strategy.

The capital increase will involve a placement of $ 138 million (£ 100.2 million) and a placement and open offer of $ 137 million (£ 99.4 million).

Ayman Asfari has irrevocably pledged to invest at least $ 38 million in fundraising and to vote in favor of the corresponding resolutions at the general meeting.

All the directors have undertaken to invest in the capital increase at the issue price.

Petrofac Chairman René Médori said: “The support of all our shareholders and creditors for the refinancing plan will provide the company with a stable platform from which to grow and look to the future with confidence. I salute the continued support of our largest shareholder and board member Ayman Asfari as Petrofac moves on to the next chapter in its history. “

Sami Iskander, Managing Director of the Petrofac Group, said: “Petrofac has a tremendous opportunity over the coming years to grow and re-establish itself as one of the world’s leading providers of essential services to the energy industry. .

Bulletin

“After a quieter period during the pandemic, we are seeing activity in our markets increase significantly at a time when the full potential of our business has been unleashed – in recent years we have refocused on compliance, rebased our cost competitiveness, and now we are re-energized under a new team and a new strategy.

“Completing the financing will cement a fantastic platform from which I am confident we will deliver significant shareholder value over the next several years. “

Mr. Asfari said: “I am delighted to support today’s fundraiser which, after more than four difficult years, puts the company squarely back on the road to recovery. I look forward to Sami and his management team restoring Petrofac to its greatest potential. “


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Egypt’s external debt is at a safe level, despite reaching an all-time high http://lorodinapoli.org/egypts-external-debt-is-at-a-safe-level-despite-reaching-an-all-time-high/ http://lorodinapoli.org/egypts-external-debt-is-at-a-safe-level-despite-reaching-an-all-time-high/#respond Sat, 23 Oct 2021 14:57:37 +0000 http://lorodinapoli.org/egypts-external-debt-is-at-a-safe-level-despite-reaching-an-all-time-high/ Egypt’s external debt hitting record high at $ 137.85 billion in June, against 134.84 billion dollars in March, analysts call for more focus on public investment to accelerate economic growth in the years to come. The World Bank Report titled “International Debt Statistics 2022,” said the external debt stock of the two largest borrowers in […]]]>

Egypt’s external debt hitting record high at $ 137.85 billion in June, against 134.84 billion dollars in March, analysts call for more focus on public investment to accelerate economic growth in the years to come.

The World Bank Report titled “International Debt Statistics 2022,” said the external debt stock of the two largest borrowers in the Middle East and North Africa region – Egypt and Morocco – increased by 14% and 19%, respectively, in 2020.

However, despite the unprecedented levels of external debt, several analysts have assessed the high potential for repayment of Egyptian debt, arguing that the short-term tranche of external debt amounts to around 9.8% of gross debt.

In addition, it is the efficiency of the use of foreign currency inflows that should matter, Hanan Ramses, an economic expert at the Cairo-based company El-Horreya Brokerage, noted.

“We should look at debt as a relative matter in percentages and not as an absolute number. What really matters is the effectiveness of debt instruments and the cost-effectiveness of their use. In addition, the Egyptian authorities have succeeded in reducing short-term foreign debt to 9.8% of the external total, ”Ramses told Al-Monitor.

In absolute numbers, Egypt’s external debt nearly quadrupled from $ 36.775 billion in 2010 to $ 137.8 billion in June 2021. Public sector debt stood at $ 98.857 billion.

Long-term debt stood at $ 121.5 billion, or 90.2 percent of gross external debt, while short-term debt stood at $ 13.3 billion, or 9.8 percent , at the end of March 2021, according to data from the Central Bank of Egypt (CBE).

“The debts have been injected into the country’s infrastructure, health care and the redevelopment of slums. The aim is to improve the standard of living of ordinary citizens across the country. However, debt ratios in terms of gross domestic product [GDP], exports, foreign exchange reserves, etc., are within spared levels, ”Ramses said, noting that external debt / GDP is around 34%.

Egypt’s external debt to gross national income (GNI) was 37% in 2020, according to the aforementioned World Bank report. report. While the external debts of South Africa and Turkey totaled $ 170.7 billion and $ 435.8 billion, respectively, in 2020, external debts represented 58% and 61% of GNI, respectively.

“Compared to other emerging economies, we are doing well,” Ramses said, noting that Egypt’s external debt maturity has shifted to long-term instruments.

Long-term external debt stood at $ 121.5 billion, or 90.2 percent of gross external debt, in March 2021, according to CBE data. Non-resident holdings of Egyptian bonds stood at $ 28.7 billion in March 2021, up 20% from June 2020.

Is there an ideal recipe for lasting control of external debt? Ramses simply puts exports and tourism at the top of his priorities.

“How to increase the country’s hard currency inflows is a major challenge. It is essential to encourage all kinds of exports and to curb imports, especially commodities produced in Egypt, ”she said.

The economist explained how rising global natural gas prices could open the door to more opportunities for Egypt, which is an exporter of liquefied natural gas and gas.

“The optimal use of economic resources will be the only way to bridge the country’s financing gap in the long term,” she added.

The country’s balance of payments recorded a surplus of $ 1.9 billion in fiscal 2021, which ended June 30, from a deficit of $ 8.6 billion a year earlier, according to CBE data.

However, Egypt’s current account gap widened to $ 18.4 billion in fiscal 2021, compared to $ 11.2 billion.

Foreign holdings of local banks fell by around $ 10 billion between February and August 2021, as some of those foreign assets were used to meet foreign currency obligations, said Zeinab Abdalla, director of financial institutions at Fitch reviews.

“As a result, the banks recorded a net international investment position of about $ 4.4 billion against a net external asset position of $ 6.7 billion at the end of February,” Abdalla told Al-Monitor. “We expect banks’ net international investment position to narrow in September, supported by foreign currency inflows from the $ 3 billion sovereign Eurobond issuance.”

Additionally, JP Morgan revealed that Egyptian bonds will be listed on the International Financial Agency’s Emerging Markets Index as of January 31, 2022. JP Morgan has set Egypt’s weighting at 1.85%.

The re-listing of Egypt is supposed to strengthen the country’s sovereign rating as well as foreign appetite for its Eurobonds. In 2011, JP Morgan delisted Egypt from its GBI-EM index following the January 25 revolution.

“The inclusion of Egypt in the JP Morgan Emerging Markets Index could help attract more foreign investors and inflows of currencies. However, the weakening of the Federal Reserve and a global rise in interest rates could trigger a new wave of sales of Egyptian Treasuries by foreign investors and further outflows, ”noted Abdalla.

She concluded: “If the banks’ net international investment position continues to widen, this could have a negative impact on their foreign currency liquidity and their foreign currency debt service capacity.


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No “Squid Game”: South Korea’s Real Debt Trap http://lorodinapoli.org/no-squid-game-south-koreas-real-debt-trap/ http://lorodinapoli.org/no-squid-game-south-koreas-real-debt-trap/#respond Fri, 22 Oct 2021 14:52:00 +0000 http://lorodinapoli.org/no-squid-game-south-koreas-real-debt-trap/ SEOUL, Oct. 22 (Reuters) – Many small business owners in South Korea can relate to the cash-strapped characters in Netflix’s hugely popular drama “Squid Game” (NFLX.O), who are desperately vying for a chance to earn $ 38 million, exposing a debt trap that is all too familiar. Near retirement at 58, Yu Hee-sook paid off […]]]>

SEOUL, Oct. 22 (Reuters) – Many small business owners in South Korea can relate to the cash-strapped characters in Netflix’s hugely popular drama “Squid Game” (NFLX.O), who are desperately vying for a chance to earn $ 38 million, exposing a debt trap that is all too familiar.

Near retirement at 58, Yu Hee-sook paid off his debts a long time ago, but still receives calls from collection agencies threatening to foreclose his bank accounts, as the loans were securitized and sold to investors at his knowledge.

“In Korea, it’s like the end of the world once you become a credit delinquent,” said Yu, who has been content with odd jobs like writing for movie magazines for the 13 years. it took to pay off debts she incurred during a failed 2002 film.

“All I wanted was a chance to pay off the debt, but the banks won’t let you make any money,” added Yu, who feels trapped in a ruthless, lifelong ordeal just like the 456s. participants in the “Squid Game” television game.

While foreigners may associate South Korea with the BTS boyband and sleek Samsung smartphones, the drama shows a grim flip side of the rise in personal borrowing, the highest suicide rate among advanced nations, and the scarcity of freeing oneself. debt.

Record household borrowing is fueling private investment and housing growth, but ruthless social mores around debt often blur the line between personal and business loans, weighing on those running small businesses.

Personal bankruptcies hit a five-year high of 50,379 last year, according to court documents.

The proportion of those falling behind on more than one type of personal debt payment rose steadily to 55.47% in June, from 48% in 2017, according to figures from Korea Credit Information Services.

“If Donald Trump was a Korean, he probably could not have become president, having filed for bankruptcy,” said a Seoul lawyer specializing in personal bankruptcies.

“In the United States, corporate debt is more separated from personal debt.”

An inadequate social safety net for small entrepreneurs and the lack of a defaults rehabilitation program are risks that could make some South Koreans desperate, and banks often ignore a five-year limit on destroying business records. insolvency.

Passengers wearing masks to avoid contracting coronavirus disease (COVID-19) walk at Seoul Station in Seoul, South Korea on October 19, 2021. REUTERS / Kim Hong-Ji / Files

“Due to traditional banking industry practices, business owners in South Korea face a high probability of relieving the debt burden of the business they run,” bankruptcy judge said Ahn Byung-wook.

Banks often require business owners to jointly guarantee the company’s loans, a practice the government banned public financial institutions from in 2018, though three owners told Reuters some suppliers persist.

Commercial loan applicants who have bad credit or a history of default in payment need collateral from state-run financial institutions in South Korea.

“Culturally, failed entrepreneurs are socially stigmatized, so it’s hard to start over because people don’t trust them,” added Ahn, who spent four years in Seoul Bankruptcy Court.

“On top of that, those who file for personal bankruptcy face a long list of employment restrictions.”

The number of self-employed workers in South Korea is among the highest in the world, accounting for a quarter of the labor market, making it vulnerable to downturns. A central bank study in 2017 showed that only 38% of these companies survive three years.

Yet, as the economic outlook grows dim, with South Koreans seeking fewer good jobs amid soaring house prices, many are betting that speculation is the only route to wealth and have taken on more debt than ever before. buy stocks and other assets.

Household borrowing roughly equals GDP at a record 1,806 trillion won ($ 1.54 trillion) in the June quarter.

“The government encourages startups but they don’t deal with failed businesses,” said Ryu Kwang-han, a 40-year-old entrepreneur who left the debtor pardon program in 2019 but still struggles to secure funding. ready.

“How is it different from ‘Squid Game’ if there isn’t a second chance?”

The global sensation has been watched by 142 million homes since it debuted on September 17, the world’s largest streaming service said, helping Netflix add 4.38 million subscribers. Read more

Reporting by Cynthia Kim; Editing by Clarence Fernandez

Our standards: Thomson Reuters Trust Principles.


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Household debts in India were skyrocketing even before the pandemic made matters worse http://lorodinapoli.org/household-debts-in-india-were-skyrocketing-even-before-the-pandemic-made-matters-worse/ http://lorodinapoli.org/household-debts-in-india-were-skyrocketing-even-before-the-pandemic-made-matters-worse/#respond Thu, 21 Oct 2021 08:00:00 +0000 http://lorodinapoli.org/household-debts-in-india-were-skyrocketing-even-before-the-pandemic-made-matters-worse/ The number of Indian households in debt and the amount they owed increased between 2012 and 2018, making these families more likely to fall into the debt trap, shows an analysis of the latest government data by Dvara Research, an organization policy research focused on financial inclusion and social protection. This increase in indebtedness is […]]]>

The number of Indian households in debt and the amount they owed increased between 2012 and 2018, making these families more likely to fall into the debt trap, shows an analysis of the latest government data by Dvara Research, an organization policy research focused on financial inclusion and social protection.

This increase in indebtedness is more marked among rural households (84%) than among urban households (42%), according to the analysis which compared the All India Debt and Investment Survey of the 70th round of the National Sample Survey with the 77th, released in September. Low-income households in cities remain more vulnerable than those in rural areas, mainly because they do not have enough valuable assets that can be sold quickly to repay their debts.

Two other important findings from this survey are that female-headed households are less indebted and southern Indian states have higher levels of indebtedness.

The All India Debt and Investment Survey collects information on the assets, liabilities, savings, consumption and capital expenditures of Indian households, such as land or property. Household debt is measured as a percentage of a country’s gross domestic product, and according to a recent study work document According to the Bank for International Settlements, increased household debt leads to increased consumption and GDP growth in the short term. However, in the long run, if the share of household debt in GDP exceeds 60%, it can have a negative impact on the economy.

In India, this percentage is 30% -40%, after falling from a high of 43% in 2008 to a low of 31% in 2016, and has risen since.

The last survey was conducted in 2019 and household debt and vulnerabilities have since increased significantly due to the ongoing Covid-19 pandemic. The share of household debt in GDP has resurrected from 32.5% in 2019-’20 to 37.3% in 2020-’21. Another to augment is slated for 2021-2022 due to bank deposit depletion as families grapple with the burden of healthcare expenses incurred during the second wave of Covid-19.

As IndiaSpend reported, the economic crisis caused by the pandemic has increased the indebtedness of small entrepreneurs, Farmers, domestic workers and marginalized communities.

Rural debt

The survey captures two key measures of indebtedness: the incidence of indebtedness, which is the share of households with unpaid debts, and the average stock of debt – the amount of debt burden per household.

Photo credit: Reuters

Between 2012 and 2018, the incidence of debt increased by four percentage points in rural areas while the average outstanding debt increased significantly in rural and urban areas by 84% and 42%, respectively, as we said earlier.

Urban poor vulnerable

The survey also assesses the debt-to-asset ratio – the outstanding debt of households as a proportion of the total value of their assets. This ratio estimates the financial health of a household, and the higher the ratio, the more precarious the financial health and the lower the capacity of a household to repay loans. (However, a better indicator of a family’s over-indebtedness is its debt-to-income ratio.)

The debt ratio increased slightly in both the rural (3.2% to 3.8%) and urban (3.7% to 4.4%) segments – that is, the value loans and mortgages of families increased, relative to their ownership of the assets.

The survey divides households into 10 asset classes based on the value of their assets. Our comparison between asset classes showed that the rise in the debt ratio is more due to households with more assets than to those with less.

The ratio is highest among the lowest rural and urban asset classes, which have negligible assets – 39.1% among the lowest rural, and 549.7% and 75.4% among the two classes. of the lowest urban assets. The poorest families today have the most debts in relation to their assets and the least capacity to repay it.

While over 90% of households in the highest rural asset classes own land, only a third of the lowest rural asset classes own it. The urban poor are worse off in this regard, with less than 1% of households in the two lowest urban asset classes owning less land.

Illiquid assets

If the debt ratio is single digits, it would indicate low debt. But this is not necessarily the case in India as most household assets are illiquid, that is, they cannot be quickly sold to raise funds to pay off debt. Land and buildings account for 87% and 91% of the value of assets in the urban and rural segments, respectively, according to the survey report.

For a more realistic measure of a household’s ability to take on debt, its debt-to-liquid asset ratio can be taken into account – it only includes assets that can be sold quickly to service the debt. In all household categories, this ratio is higher than the debt ratio – 40 to 60% among rural households and 25% to 60% among urban households. This means that across classes, Indian households are vulnerable to increasing indebtedness.

Southern states

Southern states are ahead of the rest of the country on most indebtedness indicators, both in the rural and urban segments. The figures for Kerala, Andhra Pradesh and Telangana are particularly high, and both the incidence and the volume of debt increased by several percentage points in these states between 2012 and 2018.

However, the growth of debt outpaced the growth of assets in Kerala, thus increasing the debt-to-asset ratio while the value of assets grew faster in the two Telugu-speaking states.

The share of non-institutional debt (from sources such as private lenders) in total outstanding debt in Andhra Pradesh is 64% for rural areas and 42% for urban areas; in Telangana, it is 59% for rural areas and 27% for urban areas. This figure is significantly higher than the national average (34% for rural areas and 13% for urban areas) and despite the strong presence in these states, formal financial institutions provide credit, particularly to low-income segments.

The assessment of the situation of agricultural households carried out in parallel with the survey also reveals that households in southern states are more indebted. While increased indebtedness does not necessarily mean a proportional increase in vulnerability, the latest survey report also shows that a substantial share of loans were taken out to meet consumer needs and medical spending, indicating a risk trap. the resulting indebtedness.

The incidence and volume of debt are also high in rural Rajasthan, while the volume of debt and debt-to-asset ratio are high in urban Maharashtra and Haryana.

Houses run by women

Households headed by women have a lower debt ratio, indicating less financial hardship, than those headed by men and this holds true for the entire rural-urban divide. However, those in the poorest rural households (37%) and the two poorest levels of urban households (361% and 53% respectively) headed by women have a high debt ratio, signaling financial distress among women. low income. households headed by a head.

Despite the emphasis on lending to women through microcredit andSupport Group – Banking Liaison Program, we find a lower incidence of debt and outstanding debt, on average, among female-headed households. In the rural segment, 36% of all male-headed households reported having debt (average debt was Rs 63,480), while 28% of all female-headed households reported having debt (average of Rs 35,100).

In the urban segment, this difference is higher, almost double – 23% of all male-headed households are in debt, with debt of Rs 1.3 lakh on average, compared to 18% of all male-headed households. women, who are in debt Rs 67,732 on average.

This lower likelihood and level of indebtedness observed among female-headed households may be due either to a lack of access or to fewer women opting for credit, or both, and to verify this there is needs further analysis. Studies have, however, shown a significant improvement in access to formal credit for women in India in recent years, albeit at a slower pace than for men.

We have written to the Secretary of the Department of Economic Affairs of the Union Ministry of Finance, the Chief Secretaries of Telangana and Kerala and the Secretary of Finance of Andhra Pradesh to ask what the government is doing to improve the situation. We’ll update the story when we hear from them.

This article first appeared on IndiaSpend, a nonprofit data-driven, public interest journalism organization.


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CX Daily: The volatile cocktail shaking the “Baijiu” market in China http://lorodinapoli.org/cx-daily-the-volatile-cocktail-shaking-the-baijiu-market-in-china/ http://lorodinapoli.org/cx-daily-the-volatile-cocktail-shaking-the-baijiu-market-in-china/#respond Wed, 20 Oct 2021 02:41:51 +0000 http://lorodinapoli.org/cx-daily-the-volatile-cocktail-shaking-the-baijiu-market-in-china/ Liqueur / In detail: the volatile cocktail that shakes the Chinese “baijiu” market The New CEO of the World’s Most Valuable Liquor Company means business. At a shareholders’ meeting last month, the new chairman of Kweichow Moutai Co. Ltd., Ding Xiongjun, promised a series of long-term changes to make the distiller the first Guizhou-based Fortune […]]]>

Liqueur /

In detail: the volatile cocktail that shakes the Chinese “baijiu” market

The New CEO of the World’s Most Valuable Liquor Company means business.

At a shareholders’ meeting last month, the new chairman of Kweichow Moutai Co. Ltd., Ding Xiongjun, promised a series of long-term changes to make the distiller the first Guizhou-based Fortune Global 500 company, the one of the poorest provinces in China.

But the market is facing slowing sales growth, increased regulatory oversight of stocks seen as inflated with capital, and potential industry-wide consolidation.

VPN /

Beijing Gets Green Light to Open VPN Services to Foreign Investors

Beijing municipal government got approval Council of State to give foreign investors limited access to virtual private networks (VPNs), an area the Chinese government has been monitoring closely since 2017 due to cybersecurity concerns.

The Council of State, the Chinese government, announced on its website (link in Chinese) On Monday, a decision to allow foreign telecommunications companies to form joint ventures, with their stake capped at 50%, to provide VPN services to foreign companies operating in Beijing.

FINANCE & ECONOMY

 

Xi Jinping

Common prosperity /

Full Text: Xi Jinping’s Speech on Strengthening Common Prosperity

Xi Jinping, general secretary of the Communist Party of China (CPC) Central Committee and president of China, spoke about China’s commitment to common prosperity at the 10th meeting of the Central Committee for Financial and Economic Affairs in August. Excerpts from the speech were published by the Qiushi party newspaper on Friday.

“To achieve common prosperity for 1.4 billion Chinese people, we must take concrete and lasting measures,” Xi said. “It does not mean simultaneous prosperity for everyone or the same level of wealth across the country. The degree of prosperity of different groups and regions and the timing of prosperity can vary. Common prosperity involves a process of advancement in the midst of developments and must be constantly encouraged for continued success. “

Wealth management /

First group of banks launches cross-border wealth management connection services

The first group of banks began to provide services under the wealth management connect (WMC) trial program Tuesday morning, allowing some residents of mainland China, Hong Kong and Macau to make cross-border investments.

On Tuesday, retail investors in the two special administrative regions invested 15.4 million yuan ($ 2.4 million) in wealth management products on the mainland, and 17.7 million yuan in investments in the continent have gone the other way, according to one declaration (link in Chinese) of the Guangzhou branch of the central bank.

Works /

Fighting youth unemployment, China to open more coveted civil service jobs to new graduates

Chinese government plans to offer more positions to applicants who will take the civil service exam from the end of November, with nearly 70% of vacancies open to new college graduates next year, according to the National Civil Service Administration (NCSA).

The country aims to recruit 31,200 people (link in Chinese) through its 2022 National Civil Service Examination, an increase of more than 5,000 from last year, according to an NCSA statement on Thursday. Job vacancies can be found in 75 government agencies and 23 directly attached institutions.

Covid19 /

Authorities scramble to control multiregional Covid outbreak linked to infected tourist group

Health authorities in China scramble to control a multi-regional Covid outbreak linked to a group of eight people who tested positive after traveling together in Inner Mongolia and Gansu province.

Cases linked to the group have been reported in at least four provincial-level regions, including Beijing, according to local health officials.

Quick shots /

Hong Kong Regulator Probes PwC audit on Evergrande

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Opinion: As nature fights back, the world must step up to reduce emissions

TRADE AND TECHNOLOGY

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Representatives of more than 400 creditors attended a meeting, claiming more than 100 billion yuan ($ 15.5 billion) in debt.

Representatives of more than 400 creditors attended a meeting, claiming more than 100 billion yuan ($ 15.5 billion) in debt.

Chips /

Exclusive: seven investors in talks to buy Unigroup

Tsinghua Unigroup Co. Ltd. is in talks with seven strategic investors, including state-owned China Electronics Corp. and e-commerce giant Alibaba Group, Caixin learned.

The talks suggest that the restructuring of the once-high-flying chipmaking conglomerate to solve massive debt problems is gaining momentum. Unigroup, majority-owned by Tsinghua University in Beijing, has held its first online meeting with its creditors to review its debts, the company said on Monday in a statement posted on its official social media account.

Representatives of more than 400 creditors attended the meeting, claiming more than 100 billion yuan ($ 15.5 billion) in debt, a participant told Caixin. Although Unigroup’s activities generate less than 100 billion yuan in annual revenue, the company still has the capacity to repay its debts, the person said.

Ali Baba /

Internet giants at war begin to dismantle their barriers

Internet giants Alibaba Group Holding Ltd. and Tencent Holdings Ltd. start to fall apart the walls that separate them.

Buyers who purchase products from Alibaba’s online shopping platform, Taobao, will soon be able to share their carts for the first time on group chats and Facebook-like “Moments” pages in the app for the first time. The most widely used social media in China, WeChat, operated by Tencent, learned Caixin. . Alibaba is testing the new feature and plans to launch it on Oct. 27 ahead of the annual “Double Eleven,” the Black Friday shopping extravaganza in China, the company told Caixin. Tencent declined to comment.

Tax evasion /

Ex-Chinese actress fined $ 5 million for involvement in tax evasion scheme

Zhang Heng, the former partner and agent of struggling Chinese actress Zheng Shuang, was fined 32.27 million yuan ($ 5 million) for helping Zheng hide his income and evade tax obligations amounting to more than 43 million yuan.

Zhang, who denounced the actress for tax evasion on social networks at the end of April after a falling out, it turned out to have participated in the cover-up of Zheng’s exorbitant salary for his role in the drama “A Chinese Ghost Story” in December 2018, allowing the actress to escape the ‘tax, according to an opinion (link in Chinese) posted on the website of the Shanghai branch of the State Tax Administration on Monday.

Quick shots /

Huawei wins contract for Saudi energy storage project as it expands into new activities

China refutes report he tested a hypersonic missile with nuclear capability

JD Logistics flies shopping to meet air freight demand

Energy Insider /

Baosteel, Toyota facing patent infringement action by Nippon Steel

GALLERY

Olympic flame lit for the Beijing Winter Games

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Exclusive: Seven investors in Unigroup buyout talks http://lorodinapoli.org/exclusive-seven-investors-in-unigroup-buyout-talks/ http://lorodinapoli.org/exclusive-seven-investors-in-unigroup-buyout-talks/#respond Mon, 18 Oct 2021 21:18:55 +0000 http://lorodinapoli.org/exclusive-seven-investors-in-unigroup-buyout-talks/ Tsinghua Unigroup Co. Ltd. is in talks with seven strategic investors, including state-owned China Electronics Corp. and e-commerce giant Alibaba Group, Caixin learned. The talks suggest that the restructuring of the once high-flying chipmaking conglomerate to solve massive debt problems is gaining momentum. Unigroup, majority-owned by Tsinghua University in Beijing, has held its first online […]]]>

Tsinghua Unigroup Co. Ltd. is in talks with seven strategic investors, including state-owned China Electronics Corp. and e-commerce giant Alibaba Group, Caixin learned.

The talks suggest that the restructuring of the once high-flying chipmaking conglomerate to solve massive debt problems is gaining momentum. Unigroup, majority-owned by Tsinghua University in Beijing, has held its first online meeting with its creditors to review its debts, the company said on Monday in a statement posted on its official social media account.

Representatives of more than 400 creditors attended the meeting, claiming more than 100 billion yuan ($ 15.5 billion) in debt, a participant told Caixin. Although Unigroup’s activities generate less than 100 billion yuan in annual revenue, the company still has the capacity to repay its debts, the person said.

“The convening of the creditors meeting indicated that Unigroup’s restructuring is entering a key step that will confirm strategic investors as soon as possible to help revive its business,” Unigroup said in the statement.

Read more
Caixin explains: what are the challenges of the massive restructuring of Unigroup

Government-appointed directors are evaluating restructuring proposals from seven strategic investors interested in buying the company, Unigroup said in its statement.

Unigroup did not identify the investors, but Caixin learned that they included the five shortlisted candidates in June as well as two new entrants – the main producer of state-owned electronics. China Electronics Corp. and a consortium formed by Shanghai Summitview High-Tech Venture Capital Management Co. Ltd. and Shanghai Guosheng Group.

The five candidates pre-selected in June are Guangdong Hengjian Investment Holding Co. Ltd., Beijing Electronic Holding Co. Ltd., Beijing Jianguang Asset Management Co. Ltd., Wuxi Industry Development Group Co. Ltd. and Alibaba Group. The five candidates were handpicked from 14 candidates by a task force sent by the Beijing municipal government to Unigroup to lead the restructuring. The five companies agreed to take over Unigroup as a whole and offered between 50 and 60 billion yuan for the assets.

The participant at Monday’s meeting said the Unigroup reorganization was in line with a global takeover by new investors while resolving debts.

“The seven potential investors are all long-term industrial investors, which means they can help the company gain support from bank creditors,” the person said.

Unigroup was once at the forefront of China’s drive to develop a domestic semiconductor industry. The company embarked on a series of acquisitions and investments in the capital-intensive integrated circuit sector between 2013 and 2019, forging partnerships with Intel Corp. and HP Inc. and emerging as a major player. But it failed to generate quick income in an industry known for its huge entry costs and long paybacks. Since the end of 2020, the company has defaulted on a series of bonds amid tightening capital.

Read more
Cover article: Saving the future Chinese chipmaking champion

According to documents filed by the company, Unigroup held 296.6 billion yuan ($ 46 billion) in total assets at the end of June 2020. Liabilities stood at 202.9 billion yuan, with nearly 80 billion yuan. yuan due within a year.

A Beijing court ordered Unigroup’s creditors to file claims by October 8. Under China’s bankruptcy law, the company will have until April 2022 to discuss and settle a reorganization plan with potential strategic investors. Unigroup should try to reach an agreement with the creditors for the cancellation of part of its debt and the postponement of repayment deadlines, while strategic investors will be invited to provide new funds. If the company, its creditors and potential strategic investors cannot come to an agreement, the company could be liquidated.

Regulators have expressed a preference for investors keen to take over all of Unigroup’s major assets. According to documents filed by the companies, at the end of June 2020, Unigroup had 286 subsidiaries. The most valuable assets include Tsinghua Unisplendour, the Shenzhen-listed cloud unit, security chipmaker Unigroup Guoxin Microelectronics Co., cellphone chipmaker Unisoc, and Yangtze Memory Technologies, all leading players in segments of the semiconductor industry.

But it will also make rescuing Unigroup a difficult task due to the massive assets and complicated debt involved, analysts said.

Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bonjour@caixin.com)

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Unprofitable Cypriot banks must increase performing loans and reduce sales of NPL http://lorodinapoli.org/unprofitable-cypriot-banks-must-increase-performing-loans-and-reduce-sales-of-npl/ http://lorodinapoli.org/unprofitable-cypriot-banks-must-increase-performing-loans-and-reduce-sales-of-npl/#respond Sun, 17 Oct 2021 10:52:21 +0000 http://lorodinapoli.org/unprofitable-cypriot-banks-must-increase-performing-loans-and-reduce-sales-of-npl/ By Les Manison Comparative data for the second quarter of 2021 released by the ECB as part of its Single Supervisory Mechanism reveals that the three largest Cypriot banks performed poorly compared to most of their euro area counterparts. Only Greek banks performed worse, while banks in other eurozone countries were much more profitable. More […]]]>

By Les Manison

Comparative data for the second quarter of 2021 released by the ECB as part of its Single Supervisory Mechanism reveals that the three largest Cypriot banks performed poorly compared to most of their euro area counterparts. Only Greek banks performed worse, while banks in other eurozone countries were much more profitable.

More specifically, these Cypriot banks recorded an average return of 1.25% on their equity in the second quarter of 2021, while this return for the banks of other members of the euro area ranged from -34.8% in Greece to 3.47% in Malta and 11.5% in Spain. . Return on assets showed a similar picture, with the figure for Cypriot banks being 0.09%, while those returns ranged from -2.74% for Greek banks to 0.22% for German banks and up. at 1.30% for Slovenian banks.

The low profitability of Cypriot banks is explained by the low level of their net interest income compared to their assets. Indeed, the net interest income of Cypriot banks in the second quarter of 2021 amounted to less than 0.1% of their total assets, against an average ratio of 0.7% for other banks in the euro area. Moreover, it is the composition of the asset portfolio of Cypriot banks which is almost entirely responsible for the relatively low levels of net interest income. While other euro area banks held on average over 56% of their assets in the form of interest-bearing loans and advances, Cyprus held only 42%. And according to the Central Bank of Cyprus, 17.6% of total loans from Cypriot banks at the end of June 2021 were classified as non-performing, meaning they do not earn interest, while in other countries of the euro area, with the exception of Greece, NPLs according to ECB data, major banks accounted for less than 5 percent of their total loans.

In addition, Cypriot banks have a much higher proportion of their assets in the form of cash and balances with central banks – 35.8% which “earn” negative interest – than other euro area countries which have a corresponding ratio on average 16.0%; indeed, it is a major factor depressing the net interest income of Cypriot banks.

In addition, the profitability of Cypriot banks suffers from the fact that a high proportion of its loans are impaired, which means that they have to incur significantly higher provisioning expenses than in most other countries where NPLs are much lower. as shown above. Indeed, in June 2021, the provisions of all Cypriot banks against non-performing loans had accumulated to more than 2.3 billion euros, or nearly 47% of these bad loans.

Why do stakeholders tolerate low bank profitability?

For many years, Cypriot banks have recorded low profits and losses resulting in non-payment of dividends to shareholders since 2004. And with banks’ stock prices on a persistent downward trend over the past 10 years , longer-term shareholders had virtually no opportunity for capital gains. So why do stakeholders such as major shareholders and even banking supervisors tolerate continued low bank profitability? What do they gain from a situation where banking activity is focused on debt collection, debt swaps and debt sales rather than engaging in performing loans? It appears that in recent years Cypriot banks have significantly reduced the amount of NPLs on their balance sheets by essentially selling collateral (mostly physical assets) with these loans, often at a price below market value, to acquiring companies and hedge funds. , some of whom are major shareholders of the banks themselves. These companies and funds are in turn able to sell the distressed assets at a healthy profit.

In this regard, it should be noted that government policies continue to be biased in favor of rising prices in a supercharged real estate market. The tax incentives, including a reduction in the VAT rate from 19% to 5% on real estate purchases, and the attempt to keep the ‘golden passport’ regime alive are all aimed at increasing the demand for Cypriot goods, part of which is considerable ends in collateralization of bank loans.

Thus, it appears that the lucrative activity of substantially reducing bank balance sheets through the sale of NPL is quite profitable for the major shareholders. But, with the sale of these distressed debts and the related asset transfers, there is no real wealth creation and very little funding for productive activity in the real economy. Indeed, there is wealth extraction by the systematic transfer of assets from the largest number to the small number who benefit from this process. In addition, households and non-financial corporations remain heavily indebted with debt-to-GDP ratios of around 85% and 160%, respectively, at the end of March 2021.

What can be done?

Banking activity in Cyprus needs to be reoriented towards making profits from performing loans that contribute to real economic growth rather than worrying about transactions involving the sale of distressed assets and the unproductive transfer of wealth. Banks can start making adequate profits again by increasing the proportion of interest-bearing loans on their balance sheets and drastically reducing the amount of liquidity and central bank balances bearing negative interest. But, unfortunately, many bank customers remain heavily in debt. As a result, banks have limited room to use their abundant liquidity to increase lending to creditworthy entities in order to increase their net interest income.

In addition, the government’s proposed scheme to guarantee repayment of bank loans if implemented would only add debt to an already over-indebted private sector, forcing the government to repay a new wave of debts. unproductive. Undeniably, with the cover of government guarantees, banks would not hesitate to grant loans to poorly creditworthy clients, which would inevitably result in higher taxes for Cypriot citizens, but above all would increase the total debt (private and public) and would further worsen the conditions for sustainable economic development. .

Therefore, before significant progress can be made in improving the quality of bank asset portfolios, banks should help clean up the balance sheets of non-financial corporations and households. Banks must write off unpayable debts of private sector entities and legally force and induce strategic defaulters and the delinquent rich to repay their loans. But with these actions, banks and the economy would suffer initially, as banks would suffer losses for debt write-offs as bad loans are not covered by allowances, while many entities resuming loan repayments. are expected to increase their savings and reduce their spending leading to further equity depletion and what is known as a balance sheet recession.

However, to subsequently benefit from the consolidation of balance sheets, the government should cooperate with the private sector to organize productive investments linked to a large extent to the implementation of the recovery and resilience plan. This would give banks the ability to lend to creditworthy clients to finance economically viable projects that could significantly increase their interest income. In addition, with the phasing out of non-performing loans, provisioning expenses for bad loans would be reduced and help increase bank profits.

It can be concluded that current and proposed government and banking policies will most likely continue to undermine bank profitability and increase the current excessive indebtedness of the economy. Accordingly, it is recommended that the above policy adjustments, while initially costly for banks and the economy, place banks in a position where they can make a significant contribution to financing sustained economic growth and in doing so, increase their own profitability and long-term viability.

Leslie G Manison is an economist and financial analyst specializing in macroeconomic policy analysis, bank sustainability assessments and international financial relations. He is a former Senior Economist at the International Monetary Fund, a former Adviser to the Ministry of Finance of Cyprus and a former Senior Adviser to the Central Bank of Cyprus.


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Real Debt and Desperation Behind Netflix’s “Squid Game” http://lorodinapoli.org/real-debt-and-desperation-behind-netflixs-squid-game/ http://lorodinapoli.org/real-debt-and-desperation-behind-netflixs-squid-game/#respond Sat, 16 Oct 2021 10:00:22 +0000 http://lorodinapoli.org/real-debt-and-desperation-behind-netflixs-squid-game/ SEOUL – The calling card, thrown with expert precision from a motorcycle as she pulled away, landed at Park Chui-woo’s feet as he neared the end of his wits. The brightly colored card advertised quick loans with low interest rates, especially for small business owners. At the peak of all other lines of credit and […]]]>

The calling card, thrown with expert precision from a motorcycle as she pulled away, landed at Park Chui-woo’s feet as he neared the end of his wits.

The brightly colored card advertised quick loans with low interest rates, especially for small business owners. At the peak of all other lines of credit and with payday looming for employees at his small coffee shop chain, Park dialed the phone number.

With that call three years ago, he entered the underground world of illegal private lending that tempt desperate South Koreans, then traps them with crippling interest rates, oppressive collection methods and a slippery slope leading to more debt.

Soon tattooed motorcycle skinheads showed up to chat with Park. They put down a wad of bills and started going through his store daily to collect interest, at an annualized rate of about 210%.

“You really don’t have any other choice,” said Park, 45, who has been borrowing from private loan sharks for about three years and had to increase the sum after the COVID-19 pandemic ravaged sales in his stores. cafes. “It can send you into a sand trap.”

Customers use ATMs at a Seoul subway station, where illegal private loans with crippling interest rates are a real temptation for those with few other options.

(Lee Jinman / Associated Press)

Debt is the main motivation for characters in the Netflix hit “Squid Game,” a dystopian drama series in which 456 heavily indebted participants fight to the death – literally – for a chance of winning 45.6 billion won (approx. $ 40 million).

The South Korean series resonated around the world, exploiting growing economic fears and becoming the most popular version of the streaming service to date, with 111 million views within the first 28 days. At home, however, the show’s popularity has been inseparable from the country’s very real crisis of growing household debt, gaping inequality, and a weak social safety net with significant blind spots.

South Korean household debt hit record levels in the second quarter of 2021, jumping more than 10% from the same period last year. Citizens in their 30s are the most in debt, having borrowed on average more than 260% of their income, according to the Bank of Korea. Soaring house prices and soaring stock markets over the past year have fueled borrowing, prompting young adults who see less promise in traditional employment and have turned to massive investments in stocks. or cryptocurrencies.

Official statistics fail to capture the illicit world of private lending that Park and “Squid Game” protagonist Seong Gi-hun turned to when they could no longer borrow from banks and legally registered lenders, including loans are capped by law at an annual interest rate of 20%.

At the start of the series, Seong, a laid-off autoworker plagued by gambling addiction after unsuccessful attempts to start a business, is chased by black-suit, knife-wielding lenders who force him to sign. a commitment to give up a kidney. and an eye if he doesn’t pay back in a month. Seong, played by Lee Jung-jae, then enters the “Squid Game,” where each character’s debt is revealed, and childhood games like “Red Light, Green Light” turn brutal.

“All of you in this room are in crushing debt and are now on the edge of a cliff,” one gambling runner told those gathered. “Do you want to go back and live your pathetic life running away from creditors?” Or will you seize the last opportunity we offer you? “

South Korea’s occult lending activity is difficult to quantify but appears to be pervasive. Cards and flyers promoting cash are easily visible on metro cars, bus stops and street lights. The government regulator, Financial Supervisory Service, received nearly 300,000 reports of illegal loan announcements in 2020. This is an increase of around 25% from the previous year, no doubt boosted by pandemic-related layoffs and trade restrictions that have pushed already vulnerable people deeper into finance. straits.

The Seoul-based industrial group Consumer Loan Finance Assn. said it negotiated over 5,000 high interest loan cases reported last year, in which the average annual interest charged was 401%. In one case in Gyeonggi province, which includes parts of the metropolitan area surrounding Seoul, interest on a short-term loan was 3,338% annualized, police said.

“Deadly interest rates are being charged below the surface,” said Seo Bo-kuk, senior executive at the Consumer Loan Finance Assn. “It becomes a domino effect, and a lot of people end up turning to it over and over again.”

Lee Jung-jae (number 456) in Netflix drama "Squid game."

Lee Jung-jae plays Seong Gi-hun (# 456) in a deadly competition in the Netflix drama “Squid Game”.

(Youngkyu Park / Netflix)

Contracts that require a kidney or eyeball instead of reimbursement are a bullying tactic of yesteryear and are no longer common, according to industry officials. Even so, they are portrayed in “Squid Game” and other TV shows and movies, sparking fear among those in debt to slanderous lenders. South Korea’s richest man, Seo Jung-jin, founder of biopharmaceutical company Celltrion, said in interviews that he had to give up his organs as collateral to borrow from loan sharks to keep his business afloat following the Asian financial crisis of the early 2000s.

“My debt would not be covered even if I sold all my organs,” said Park, the owner of the cafe, who noted that his lenders had never made such promises.

Nowadays, lenders demand the phone numbers of relatives and friends of debtors in order to harass them if the debt is not paid on time, or if they show up at the work places of the debtors, according to the accounts of the debtor. industry. Some go further. In 2017, a 27-year-old private lender from Incheon City was sentenced to five years in prison for sexually assaulting a woman who owed him about $ 8,500.

“People turn to it knowing that interest rates are high,” said Jung Deok-gil, an investigator with the special division of the judicial police in Gyeonggi Province. “They use it because they desperately need the money but don’t have the credit for it.”

Park said illegal creditors were a lifeline in paying employees and keeping stores open. Earlier this year, he managed to wean himself off loans but returned to it a few months ago when prolonged pandemic restrictions and other complications plagued his business. At present, he has two 60-day loans of 20 million won (approximately $ 17,000) each. In total, he has about $ 850,000 in debt, legal and otherwise.

“I have no bitcoin, no stocks, no real estate, no inheritance,” he said. “For someone like me, in the South Korean financial system, we cannot do without private loans.”

So far he’s barely holding up – relieved to have made October pay. He didn’t have time to watch “Squid Game” or think about it beyond the show’s headlines. The reality in South Korea, for him, is quite dystopian.

“Once COVID-19 is over, it could be a whole different game,” he said. “All the social issues that we swept under the table and pushed back during the pandemic – it’s a huge time bomb.”



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