Addis Ababa: Loans extended to companies in South Korea grew at a faster pace in the first quarter on increased demand for operating funds, central bank data showed Tuesday. The outstanding loans extended to local companies came to 1,979.5 trillion won (US$1.46 trillion) as of end-March, up 17.3 trillion won from three months earlier, according to the data from the Bank of Korea (BOK).

According to Ethiopian News Agency, the increase marks a sharp acceleration from a 3.3 trillion-won gain in the previous quarter, when the loan growth slowed to its lowest pace in about eight years. By sector, loans to manufacturing firms rose 8 trillion won from three months earlier to 491.4 trillion won as of end-March, following a 1.6 trillion-won decline in the fourth quarter of 2024.

Loans in the service sector expanded by 7.8 trillion won to 1,261.5 trillion won over the same period. By purpose, operating funds increased by 9.5 trillion won in the first quarter, reversing from a 3.4 trillion-won decline in the fourth quarter of 2024. Facility investment loans advanced by 7.8 trillion won, accelerating from the 6.7 trillion-won increase seen in the previous quarter.

“Corporate overdraft loans that had been temporarily repaid at the end of last year for financial ratio management were reissued at the beginning of this year, and demand for funds ahead of the Lunar New Year also went up, leading to a rise in operating loans in the first quarter,” a BOK official said. “There was also a seasonal factor, as companies covered funding shortfalls through loans, given that the first quarter is generally the off-season for the service sector.”