Household loans at five major South Korean banks shrank for the third straight month in March.

According to the financial industry on Friday, the combined outstanding loans extended by five major lenders such as KB Kookmin, Shinhan and Hana, came to 703-point-19 trillion won as of the end of March, down two-point-74 trillion won from a month earlier.  

The figure has been on a three-month decline since January.

Industry insiders attributed the drop to improved loan repayment and a decrease in new lending due to hikes in the interest rate. 

The combined outstanding credit loans came in at 133 trillion won in March, also down two-point-45 trillion won from a month ago.

Outstanding home-backed loans, however, rose to 506-point-seven trillion won in March, a slight increase of 65 billion won from the previous month.