[Exclusive] Sanlim Johap to Fully Suspend Household Loans for Non- and Semi-Members... Loan Counters to Close

Korea Federation of Forest Cooperatives "In the Context of Total Household Loan Management"
Temporary Suspension of Non-Residential Secured Loans Including Land and Forests

[Asia Economy Reporter Song Seung-seop] A wave of household loan suspensions is spreading across the mutual finance sector. This is due to the financial authorities tightening the total volume of household loans at commercial banks, causing loan demand to shift to secondary financial institutions. Following Nonghyup and Suhyup, even the Korea Forest Cooperative has locked its loan windows, which is expected to further dry up funding sources for real demand borrowers by the end of the year.

According to the financial sector on the 8th, the Korea Forest Cooperative has decided to completely suspend household loans for quasi-members and non-members. Starting from the 12th to 13th, it plans to temporarily halt the operation of non-housing secured loan products, including unsecured loans, mortgage loans, and loans secured by land or forest land. The Korea Forest Cooperative has a higher proportion of non-housing secured loans compared to other financial sectors.

This measure was reportedly explained in person by the Korea Forest Cooperative’s credit officer during a visit to the financial authorities. On the 1st, the financial authorities also summoned related personnel and requested strict adherence to the household loan total volume targets. This is because the household loan growth rate of over 130 Korea Forest Cooperatives nationwide has exceeded 5%. The annual growth target was set at an average of 4%, which has already been surpassed.

However, existing cooperative members can continue to receive loans. A Korea Forest Cooperative official explained, "This decision was made to manage the total volume of household loans as requested by the financial authorities," but added, "Due to the nature of mutual finance, it was difficult to suspend loans to cooperative members."

Suhyup also completely suspended new household loans starting from the 1st of this month. Suhyup does not allow loans to non-members, quasi-members, or members. Currently, mortgage loans, jeonse deposit loans, and interim payment group loans are suspended. Among Suhyup members, loans are only available on a limited basis when funds are needed for fishery management. It is known that Suhyup exceeded the annual household loan total volume target of 4.1% set by the authorities in the first half of the year.

The Nonghyup Central Association also suspended all new group loans, jeonse deposit loans, and mortgage loans for non-members and quasi-members at agricultural and livestock cooperatives nationwide in August.

Amid this ongoing relay of loan suspensions, voices of concern and warnings are emerging in the political sphere. Yoo Ui-dong, a member of the National Assembly’s Political Affairs Committee from the People Power Party, said, "The banking sector has always exceeded the annual household loan total volume targets, and the financial authorities did not raise issues about this until suddenly tightening household loans, which caused a crisis," criticizing, "It is an ignorant household loan total volume regulation and the methods are abnormal."

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