The New Leap Fund has acquired an additional 960.2 billion won in long-term delinquent loans held by the National Agricultural Cooperative Federation Asset Management Company, mutual finance institutions, and private lenders. This acquisition will benefit approximately 116,000 debtors, and collection efforts will cease immediately.
On May 29, the Financial Services Commission announced that the New Leap Fund purchased long-term delinquent loans from various entities, including the National Agricultural Cooperative Federation Asset Management Company, Saemaul Geumgo, Suhyup, Shinhan Bank, and public institutions. The fifth round of purchases targets unsecured loans of less than 50 million won that have been delinquent for over seven years.
By sector, the largest portion of the loans came from the National Agricultural Cooperative Federation Asset Management Company, totaling 561.7 billion won, affecting 58,000 debtors. Other included amounts were 179.4 billion won from 14 private lenders, 59 billion won from four public institutions, 57.5 billion won from credit card companies, 34.7 billion won from Saemaul Geumgo, 34.4 billion won from Suhyup, and 33.2 billion won from Shinhan Bank.
Following the loan acquisition, collection efforts will be immediately halted. Loans owed by vulnerable social groups, such as basic livelihood recipients, will be forgiven without a separate assessment of repayment ability. This includes individuals receiving disability pensions among the severely disabled and those receiving living adjustment allowances or livelihood support among veterans. Other loans will undergo assessments to determine repayment ability. If a debtor's income falls below 60% of the median income and they lack recoverable assets, their debts may be forgiven within one year.
With this fifth round of purchases, the total amount of long-term delinquent loans secured by the New Leap Fund has reached 9.1232 trillion won, benefiting approximately 750,000 individuals based on overlapping criteria. Cumulatively, the amounts acquired by sector include 5.9117 trillion won from the public sector, 847.3 billion won from credit cards, 635.4 billion won from private lenders, 541.7 billion won from banks, and 562.1 billion won from other asset management companies.
Next month, the New Leap Fund plans to acquire additional long-term delinquent loans held by the Sangnoksu First Special Purpose Company, the Korea Credit Guarantee Fund, the National Agricultural Cooperative Federation, and private lenders. A comprehensive survey of companies holding long-term delinquent loans, similar to Sangnoksu, is also underway.
The Financial Services Commission is also working to expand participation from the private lending sector. Currently, 15 out of the top 30 private lenders holding long-term delinquent loans have joined the New Leap Fund agreement. Financial authorities are considering practical incentive measures to increase participation from private lenders and will continue to communicate with the industry.
* This article has been translated by AI.
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