The New Leap Fund has acquired an additional 2.6 trillion won in long-term delinquent loans held by securitization companies, public institutions, mutual finance, and lending companies. This purchase will immediately halt collection efforts against 236,000 debtors.
The Financial Services Commission announced that on July 31, the New Leap Fund purchased 2.6146 trillion won in long-term delinquent loans from securitization companies such as Sangnoksoo and K-Bista, as well as from public institutions like the Korea Credit Guarantee Fund, and mutual finance entities including Nonghyup and credit cooperatives.
The sixth round of purchases included 1.4449 trillion won in bonds held by public institutions, 1.0316 trillion won in other bonds from securitization companies, and 1.04 trillion won in loans from lending companies. Bonds worth 273 billion won from 383 Nonghyup branches and 68 billion won from 98 credit cooperatives were also included in the acquisition.
Notably, the purchase of bonds worth 7.235 trillion won from Sangnoksoo and 2.817 trillion won from K-Bista has been completed. The remaining bonds from these two companies, which are not eligible for New Leap Fund support, are scheduled to be sold to the Korea Asset Management Corporation in the second half of this year.
With the acquisition of these bonds, collection efforts will cease immediately. Debts of vulnerable groups, including basic livelihood recipients and severely disabled individuals receiving disability pensions, will be extinguished without a separate repayment ability assessment.
For other debtors, if their income and assets are assessed and deemed to have effectively lost repayment ability, their debts will be extinguished within one year. In cases of significant repayment inability, debt adjustments such as principal reductions and long-term installment repayments will be implemented.
The assessment of repayment ability is set to begin in the third quarter, following the implementation of a revised credit information law on August 13, which allows the New Leap Fund to collect financial asset information.
Since its first acquisition in October of last year, the New Leap Fund has purchased a total of 11.7378 trillion won in long-term delinquent loans. Approximately 957,000 debtors have benefited from this initiative, including duplicates.
By sector, the cumulative purchase amount is highest for public institutions at 7.3566 trillion won, followed by other asset management companies at 1.5936 trillion won, credit card companies at 847.3 billion won, and lending companies at 739.4 billion won.
Currently, 15 of the top 30 lending companies have joined the New Leap Fund agreement. Financial authorities are reviewing practical incentive measures to encourage lending companies to participate more actively in the sale of long-term delinquent loans and plan to continue discussions with the industry.
* This article has been translated by AI.
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