Mutual Finance Sector Cannot Exceed 30% Loan Ratio in Real Estate and Construction Industries

Published 12 Jan.2022 15:28(KST)

[Asia Economy Reporter Kim Jin-ho] From now on, mutual financial institutions such as ShinHyun, NongHyup, and Suhyup must limit the proportion of real estate and construction industry loans within personal business and corporate loans to 30% or less. The total amount must be 50% or less of the total loans.

The Financial Services Commission announced on the 12th that it had approved the "Amendment to the Mutual Finance Business Supervision Regulations" with these key points at its regular meeting.

Additionally, the liquidity ratio must be maintained at 100% or higher, but this will be relaxed differentially for small-scale cooperatives. Cooperatives with total assets of 30 billion KRW or more but less than 100 billion KRW as of the previous fiscal year-end must maintain at least 90%, and those with less than 30 billion KRW must maintain at least 80%.

The amendment will take effect from December 29, 2024.