The concentration of the Supply Chain Stabilization Fund on large corporations and issues related to the management of delinquent loans were scrutinized during a National Assembly oversight hearing on the Export-Import Bank of Korea. Over 90% of the fund's support has been directed to large corporations, with only one instance of support for small and medium-sized enterprises (SMEs). Additionally, it was revealed that the average time taken for the review of delinquent loans is 3 years and 8 months, exposing weaknesses in internal controls.
During the hearing on October 20, Jung Tae-ho, a lawmaker from the Democratic Party, pointed out that while 73% of leading supply chain businesses are SMEs, large corporations accounted for 51% of the cases and 91% of the funding. He emphasized the need to create a domestic ecosystem for materials, parts, and equipment, questioning whether the current distribution is overly concentrated.
Jung criticized the fact that the SME-focused supply chain support program, introduced last year, has only one recorded instance of support, stating, "The system is in place, but it is not being operated effectively."
Hwang Gi-yeon, president of the Export-Import Bank, acknowledged the urgent demand for crude oil and critical minerals due to the crisis in the Middle East and stated, "We will enhance special loan limits and activate the supply chain coexistence program, expanding participation from SMEs."
Concerns were also raised about the fund's support being overly focused on short-term buyer loans. Kim Sang-hoon, a lawmaker from the People Power Party, noted that while 2.55 trillion won was allocated to the critical minerals sector, 74% was for buyer loans, arguing that such short-term loans are unlikely to effectively change the supply chain structure. There has been no execution of investments in critical minerals or overseas resource equity loans.
Kim Young-hwan, another lawmaker from the Democratic Party, questioned whether the repeated short-term loans centered on buyer funding align with the operational goals of the Supply Chain Stabilization Fund. Hwang admitted that support had been primarily focused on buyer loans and pledged to expand support for facility investments.
The issue of financial support for Korea Zinc's U.S. smelting plant project was also raised. Of the total project cost of $7.4 billion, the U.S. government has committed approximately $4.7 billion in policy financing, while the Export-Import Bank has yet to decide on its support. Kim Sang-hoon emphasized the need for swift decision-making from the bank, which is currently discussing the use of the Supply Chain Stabilization Fund with Korea Zinc.
The management system for delinquent loans also came under scrutiny. It was revealed that the average time taken for the Export-Import Bank to complete responsibility reviews for 132 cases was 1,330 days, approximately seven times longer than the average of 192 days for the Industrial Bank of Korea. During the delays, 36 related personnel retired, and no substantial disciplinary actions or compensations were made. Additionally, 64 cases of converted delinquent loans were excluded from the responsibility review process.
The Export-Import Bank explained that the delays were due to the unique nature of policy financing and negotiations with overseas creditors. However, to enhance the effectiveness of responsibility management, regulations were amended on October 12 to advance the review timing from the loss recognition stage to the estimated loss stage, and to include converted loans in the review process.
* This article has been translated by AI.
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