Assemblyman Shin Jeong-hoon Points Out "Direct Loans from Jungjin Gong Increasing Non-Performing Loans Annually"

[Asia Economy Honam Reporting Headquarters Reporter Park Seon-gang] It has been revealed that the amount of non-performing loans from direct loans managed by the Small and Medium Business Corporation (SBC) is rapidly increasing every year, raising concerns that more attention should be paid not only to quantitative expansion but also to supporting qualitative growth.

On the 19th, after analyzing data submitted by SBC to Assemblyman Shin Jeong-hoon (Jeonnam Naju-Hwasun, Democratic Party, Industry, Trade, and Small and Medium Business Committee), it was found that the amount of non-performing loans from direct loans was 341.1 billion KRW in 2015, 375.7 billion KRW in 2016, 434.5 billion KRW in 2017, 484.6 billion KRW in 2018, and 518.8 billion KRW last year, showing a sharp increase year by year. This year, as of August, it has already reached 272.5 billion KRW.

The number of companies with non-performing loans also nearly doubled from 1,679 in 2015 to 3,116 in 2019.

Analyzing the status of non-performing loans by year and type, long-term delinquency accounted for the largest portion with 1.2636 trillion KRW, representing 52.1% of the total non-performing loans of 2.4272 trillion KRW during the same period.

Following that were rehabilitation at 474.5 billion KRW (19.5%), temporary closure or business suspension at 377.3 billion KRW (15.5%), third-party auction applications at 105 billion KRW (4.3%), financial delinquency at 77.3 billion KRW (3.2%), others at 68.9 billion KRW (2.8%), bankruptcy at 45.7 billion KRW (1.9%), collateral damage at 9 billion KRW (0.4%), and workout at 5.9 billion KRW (0.2%).

Moreover, the amount written off (loss processed) is also on the rise, totaling 1.3594 trillion KRW from 2015 through August this year. By year, it was 120.8 billion KRW in 2015, 210.1 billion KRW in 2016, 200.8 billion KRW in 2017, 286.5 billion KRW in 2018, 336.5 billion KRW in 2019, and as of August this year, 204.7 billion KRW.

Assemblyman Shin Jeong-hoon stated, “If the deterioration of loan assets continues, there are concerns about increased debt and worsening financial structure. SBC’s policy funds are mainly provided in areas of market failure and financially vulnerable sectors, and government support is urgently needed in areas such as youth startups, emergency management stabilization funds, and business revitalization. I agree that these policies are necessary.” However, he pointed out, “There needs to be a clear distinction in support between so-called ‘zombie companies’ that lack competitiveness and are bound to fail, and companies with excellent technological business potential that, if given financial breathing room, can induce job creation and drive innovative growth.”

He added, “It is necessary to strengthen evaluation by closely analyzing growth potential, future new growth prospects, and employment creation effects, and after support, to promote reduction of default rates through proactive measures based on continuous monitoring of signs of insolvency, thereby enhancing fiscal soundness. Rather than just easy financial support, I hope that not only quantitative expansion but also qualitative growth of small and medium enterprises will be supported through proper startup consulting and thorough failure cause analysis-based re-startup support.”

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