North Korean high school students are taking out bank loans through their mobile phones without their parents’ knowledge, spending the money on smartphone games and consumer goods and leaving their families to deal with the debt, a source in South Hamgyong province told Daily NK recently.
“Recently, high school in Hamhung have been borrowing money from banks without their parents’ permission and using it to buy things they want or to spend on entertainment,” the source said. “In the past, children who needed money asked their parents. Now that they can borrow easily through a bank, they do it on their own terms, and parents are beside themselves with worry.”
Under North Korea’s current mobile banking system, anyone with a mobile phone and a bank account registered in their own name can access financial services with relative ease. The problem, the source said, is that this access extends to teenagers without meaningful restriction.
Students at the high school level can borrow up to 500,000 North Korean won at an interest rate of around 3%. The source said it is not uncommon for students to use these loans to pay for premium features in smartphone games or to buy expensive items they have long wanted.
Parents left holding the debt
The result is that some parents are finding themselves responsible for repaying loans their children took out without consulting them. For families that can absorb the cost, the financial burden is manageable, if unwelcome. But the concern is not only financial. Even parents who can afford to repay the debt worry that their children are developing a habit of borrowing before they have any real understanding of what money is worth.
The source described one case from Hamhung in which a parent had bought their third-year high school student a smartphone and set up a bank account, worried their child would be left out socially. The student then borrowed 500,000 North Korean won from the bank. “The parent was exasperated,” the source said, “but couldn’t bring themselves to say anything harsh, knowing their child would be going into military service next year, and so was just suffering in silence.”
Parents are also directing their frustration at the state. “Parents are criticizing government policy for creating a lending system that makes it so easy for children to borrow money,” the source said. “There are people saying this is leading children into debt before they even understand the value of money, setting them on a path to becoming delinquents.”
The pattern appears to be an unintended consequence of North Korea’s broader push to encourage banking use among the general population and expand mobile-based financial services. Teenagers, who are more comfortable with mobile phones and less inhibited about formal banking than their parents, have taken to the lending system readily, with the resulting debt falling on their families.
Parents’ reluctance to use banks is itself telling. “Parents are not often the ones borrowing through banks,” the source said. “They are wary of banking transactions because the State Information Bureau (formerly the Ministry of State Security), which oversees domestic intelligence and surveillance, can monitor transaction records and track the flow of funds in detail.”
In practice, many adults still prefer to borrow from individuals rather than institutions, even though private lending carries significantly higher interest rates, because it leaves no traceable record. “In the end, it is only children who don’t fully understand the situation that the bank lending system is actually working on,” the source said. “Parents are suddenly facing a financial burden they didn’t see coming, and on top of that the problem of managing their children’s behavior — they are in a very deep bind.”
Reporting from inside North Korea
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June 8, 2026 at 10:35PM
by DailyNK(North Korean Media)