KAMCO to Purchase 5 Billion KRW Worth of Movable Property-Backed Non-Performing Loans Next Month

[Asia Economy Reporter Haeyoung Kwon] Korea Asset Management Corporation (KAMCO) will officially launch a movable property collateral recovery support organization with a scale of 5 billion KRW starting next month. By actively purchasing non-performing loans secured by movable property collateral, the supply of funds to small and medium-sized enterprises (SMEs) with insufficient credit is expected to become smoother.

According to KAMCO on the 14th, KAMCO Movable Property Finance Support, a movable property collateral recovery support organization, will begin purchasing bonds in June.

KAMCO Movable Property Finance Support plays a role in purchasing movable property collateral or non-performing movable property secured loan bonds to alleviate uncertainties faced by financial companies during the movable property collateral recovery stage. Banks have been reluctant to handle movable property secured loans due to difficulties in bond recovery. Accordingly, through a policy organization that supports bond recovery, banks are encouraged to actively engage in movable property secured lending. The Financial Services Commission announced the establishment plan for the movable property collateral recovery support organization in the '2020 Economic Policy Direction' announced in December last year.

KAMCO signs purchase agreements for movable property secured loan bonds with financial companies and manages and disposes of movable property collateral if defaults occur. This is expected to contribute to revitalizing fund procurement for SMEs through movable property collateral by reducing the burden on financial companies for recovering non-performing loans and managing collateral items.

A KAMCO official stated, "We will acquire non-performing movable property secured loans worth 5 billion KRW held by commercial banks next month," adding, "We plan to expand the project through agreements with financial companies in the future, which will partially alleviate the funding difficulties of SMEs."

This content was produced with the assistance of AI translation services.