The number of South Korean borrowers from private money lenders fell in the first half of last year as private lenders tightened loan standard after a cut in the maximum legal lending rate, financial watchdog data showed Thursday.

The number of those who borrowed money from private lenders stood at 2,367,000 as of end-June 2018, down 4.3 percent or 106,000, from six months ago, according to joint data from the Financial Services Commission and the Financial Supervisory Service.

Users of private money lenders tend to have too low a creating rating that they do not qualify for bank loans and suffer from higher borrowing costs.

The government lowered the maximum legal lending rate in February last year from 27.9 percent to 24.0 percent to reduce debt-servicing burden for low-credit borrowers.

However, the private lenders tightened loan standard, increasing the refusal of loan request.

The average lending rate among private lenders was an annualized 20.6 percent as of the end of June, down from 21.9 percent six months earlier.

The number of private money lenders gained 84 from six months earlier to 8,168 at the end of June due to a rise in the peer-to-peer (P2P) lenders.

The outstanding loan among private lenders amounted to 17.4 trillion won (15.4 billion U.S. dollars), up 5.7 percent from six months ago.

The delinquency ratio, which gauges loans overdue at least 30 days, rose 1.2 percentage points over the six months to 7.0 percent as of end-June.