Financial Authorities to Promote Increased Member Share in Mutual Finance Loans Including Shinhyup and Nonghyup

[Asia Economy Reporter Kwangho Lee] Financial authorities are pushing for measures to increase loans to members in mutual finance cooperative loans.

According to the financial sector on the 21st, financial authorities are considering a plan to give higher weights to members when calculating the loan-to-deposit ratio (loan amount compared to deposits) of mutual finance, which is currently between 80% and 100%.

The loan ratio between members and non-members in mutual finance varies by sector. Credit unions must allocate two-thirds of their loans to members. Nonghyup has half of its loans going to members, which also includes loans to quasi-members and deemed members.

Quasi-members refer to people living in the unit Nonghyup area who do not farm, and organizations created by farmers. Deemed members include members of other cooperatives or direct lineal ascendants and descendants living with members.

In other words, more than half of Nonghyup loans go to people who do not farm.

First, the Financial Supervisory Service is collecting written data from each financial institution to check the scale of loans by region and type. Based on this, financial authorities are expected to select targets for on-site inspections.

Meanwhile, the balance of non-residential secured loans, including land, in mutual finance was 257.5 trillion won as of December last year, an increase of 30.7 trillion won compared to a year earlier.

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