The risk of loan defaults among elderly self-employed business owners is rising rapidly in Busan, prompting calls for an urgent, tailored safety net spanning pre-startup diagnosis, debt management, and support for recovery after business closure.
According to the Busan City Council on the 23rd, the Planning and Economy Committee has begun a policy review of the entire Busan City support system, viewing the expansion of financial risk among elderly self-employed business owners as a structural change rather than a temporary economic downturn. The committee reached this conclusion by analyzing guarantee execution and guarantee default statistics from the Busan Credit Guarantee Foundation and the Bank of Korea's Financial Stability Report.
The analysis found that financial risk among self-employed business owners aged 60 and over is clearly expanding. According to the Busan Credit Guarantee Foundation, the share of guarantee executions for the elderly aged 60 and over rose from 15.0% in 2022 to 20.08% this year, an increase of 5.08 percentage points. Over the same period, the share of guarantee defaults also rose from 11.02% to 14.45%, an increase of 3.43 percentage points, with the pace of increase steepening particularly since last year.
The situation is similar nationwide. According to the Bank of Korea's Financial Stability Report, the number of self-employed business owners aged 60 and over rose from 1.842 million in 2015 to 2.697 million in 2025, and their share of all self-employed business owners expanded from 26.7% to 41.2%. Their financial debt increased more than fourfold over the same period, from 96 trillion won to 405.7 trillion won.
In particular, the deepening of aging among low-income groups is cited as a risk factor. Among self-employed business owners in the bottom 30% of income, the share aged 60 and over exceeded half, rising from 31.9% to 56.1%, and their average loan size was found to be larger than that of younger and middle-aged groups. This means a structure is becoming entrenched in which income remains weak while the debt burden grows heavier.
The committee also assessed that Busan City's support policies for small business owners are not adequately responding to the structural change. Busan City currently operates various programs, including a total package for management improvement, incentives for enrollment in the Yellow Umbrella Mutual Aid, business closure assistants, and support for employment and industrial accident insurance premiums, but most target all small business owners without distinction by age. Programs aimed at the elderly are concentrated on online sales channel support, such as digital transformation education for middle-aged and older small business owners that began this year.
Going forward, the committee plans to focus its review on whether a system for managing age-specific statistics on the sector, debt, guarantee defaults, and business closures of elderly self-employed business owners has been established, as well as pre-startup counseling and business viability diagnosis systems to respond to the increase in subsistence-type startups. It plans to actively reflect the results in reviews of budget proposals and ordinance bills, as well as in administrative audits.
Kim Tae-hyo, chairman of the Planning and Economy Committee, said, "The fact that both the Busan Credit Guarantee Foundation and Bank of Korea analyses show an expansion in the default risk of elderly self-employed business owners means this is no longer an individual problem but a structural risk." He added, "We must establish a tight safety net that connects beyond digital education to pre-startup diagnosis, management risk control, easing of debt burdens, and support for recovery after business closure."
