[2020 National Audit] Jeong Jeom-sik "Suhyup Union, Delinquency Rate Emergency... Continually Rising Under Moon Administration"

Assemblyman Jeong Jeon-sik. (File photo)
Photo by Yonhap News

[Asia Economy Reporter Joo Sang-don] The delinquency rate on loans of the Suhyup Central Association’s cooperatives has been rising again since the Moon Jae-in administration, raising urgent calls for countermeasures.

According to Jeong Jeom-sik, a member of the National Assembly’s Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee from the People Power Party, the delinquency rate of Suhyup cooperatives’ loans was on a downward trend at 2.56% in 2015, 1.89% in 2016, and 1.67% in 2017. However, it has risen again since the Moon Jae-in administration took office, reaching 2.04% in 2018, 2.78% in 2019, and 2.88% as of July 2020.

The amount of overdue loans has exceeded 700 billion won. It has continuously increased from 334.4 billion won at the end of 2016 to 655.8 billion won at the end of 2019, and reached 722.7 billion won as of the end of July this year. This is an increase of 334.5 billion won compared to 388.2 billion won in 2015.

Rep. Jeong explained, "Delinquencies occurred due to borrowers’ reduced repayment ability, especially among individual business owners, caused by the downturn in the domestic economy, and the decline in collateral value due to polarization in the real estate market." He added, "The downturn in regional economies accelerated by the slump in the shipbuilding and automobile industries and the impact of the novel coronavirus disease (COVID-19) has increased delinquent loans among member cooperatives, which are key business bases in coastal and island areas." He further stated, "A red light has come on in managing delinquencies at Suhyup cooperatives," emphasizing that "urgent measures are needed."

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