Household credit risks have spiked to the highest levels in nearly two decades amid stubbornly high inflation. 

According to the Bank of Korea survey of local lenders on Wednesday, the credit risk index for households jumped from 33 in the third quarter to 42 in the fourth quarter, the highest since the third quarter of 2003, when it was tallied at 44. 

The central bank said some vulnerable borrowers’ ability for repayment will decline as a result of the slowing economy, and interest burdens will increase amid a hike in loan interests, resulting in a significant rise in household credit risks. 

The credit risk for large companies and small- and mid-sized enterprises also rose by six points each to 17 and 31, respectively. 

The survey was conducted on over 200 financial institutions between late August and mid-September.