The number of credit delinquents is nearing 4 million, or more than 8 percent of the population, highlighting the urgent need to tackle the debt problems stalling the nation's economic recovery.

Some 3.83 million people were at least 3 months in arrears on debt payment with financial institutions at the end of April, up 1.51 percent, or 56,871 persons, from a month earlier, according  to the Korea Federation of Banks. If other people who are behind on their on their tax payments or court-ruled obligations are included, the number swells o a record 3.97 million.

The government is eager to curb rising consumer delinquencies, as this is a key factor in reviving private spending and spurring Korea's economy to grow at its target of almost double last year's 3.1 percent.

On May 20, a government-led "bad-bank" started operation, aiming to provide lifelines  for up to 1.8 million debt defaulters. Individual lenders are also proceeding with debt restructuring programs for delinquent borrowers who are not eligible for state-arranged loan extensions.

Still, slight chances are seen for major turnaround in domestic demand within the year, as a range of uncertainties, such as sky-high oil prices and possible monetary tightening in China and the United States, is dampening the local economy.

Separate statistics from the Bank of Korea yesterday underscored the hardships Korean households are experiencing amid heavy debt loads. Credit card spending during the first three months of this year plunged 41 percent from a year earlier.

The amunt of credit card spending settled in the first quarter averaged at 968 billion won (U$827 million) per day, compared to 1.6 trillion won during the same period last year. It was the first time the daily tally fell below the 1 trillion won mark since the BOK began to track the figures in the first quarter of 2002.

According to the Bank of Korea, the fall is attributable to credit card companies' cuts in credit ceilings and an increase in cash advance service charges, along with rising debt delinquencies.

Use of credit card (during the 1st quarter of 2004)