More Than Half of Long-Term KODIT Guarantee Users Classified as 'At Risk of Insolvency' [2025 National Audit]

Choo Kyung-ho, member of the People Power Party

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It has been revealed that over half of the companies that have used credit guarantees from the Korea Credit Guarantee Fund (KODIT) for more than 10 years are classified as being in the "at-risk of insolvency" category. There are growing concerns that the system is becoming entrenched not just as a means of providing short-term liquidity support, but as a structure that effectively enables the long-term survival of financially distressed companies, necessitating a thorough review.

According to data submitted by Choo Kyung-ho, member of the People Power Party and member of the National Assembly’s Political Affairs Committee, the number of companies that have been using KODIT guarantees for an extended period stood at 4,485 as of August this year. Among these, only 41 companies (0.9%) were considered high-quality, while 1,881 companies (41.9%) were classified as having stagnant growth, and 664 companies (14.8%) as having weakened credit. In total, 56.7% of these companies fell into the potential insolvency risk category.

The scale of guarantees is also expanding rapidly. The outstanding guarantee balance for long-term KODIT users increased by 37.6%, from 2.8395 trillion won in 2020 to 3.9065 trillion won as of August this year. Notably, the guarantee balance for companies with stagnant growth and those with weakened credit-which had declined last year-increased by 17.6% and 13.4% respectively this year, indicating that funds are increasingly being concentrated in companies with insolvency concerns.

In terms of guarantee usage duration, 949 companies (21.2%) have been using KODIT guarantees for over 20 years, and the three longest-term users have received guarantees for as long as 36 years. All three of these companies are classified as either having stagnant growth or weakened credit, highlighting a structural limitation in which long-term usage does not lead to business recovery but instead results in the accumulation of insolvency risk.

KODIT manages long-term users through consulting and restructuring programs; however, only 314 companies (7% of the total) participated in consulting programs this year. The number of companies supported by the preemptive restructuring programs "Build-up" and "Value-up" stood at just 50 and 121, respectively, meaning that only a small portion of the thousands of long-term users are benefiting from management improvement programs.

Choo emphasized, "KODIT guarantees are increasingly deviating from their original purpose of providing temporary liquidity relief and supporting growth, and are instead solidifying into a system that enables the long-term survival of at-risk companies." He stressed, "Institutional reforms must be actively pursued to ensure that restructuring programs lead to genuine normalization and self-reliance."

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