"Jeonse Fraud Low-Interest Loans: More Recipients Than Applicants"[2024 National Audit]

Number of Loan Disbursements Exceeds Loan Applications for Jeonse Fraud Low-Interest Loans
"Status Not Properly Tracked, Management Lax"

Appearance of Assemblyman Park Yong-gap. [Photo by Yonhap News]

The government is providing low-interest loans to victims of jeonse fraud, but there are concerns that it is not even properly tracking the loan status. In some regions, the number of actual loans executed exceeded the number of loan applications submitted.

According to the "Low-Interest Jeonse Loan Support Performance for Jeonse Fraud Victims" data received by Park Yong-gap, a member of the National Assembly Land, Infrastructure and Transport Committee from the Ministry of Land, Infrastructure and Transport (MOLIT) on the 16th, from June last year to June this year, some regions showed more loans executed than applications submitted.

Among 393 jeonse fraud victims in Daegu, 25 applied for this loan, but 26 loans were executed. In Ulsan, 16 out of 133 victims applied, and 17 loans were executed. In Gyeongnam, 16 out of 241 victims tried to get loans, but the loan performance recorded 20 cases.

The MOLIT did not have this data on hand but obtained it from the Financial Services Commission and submitted it to Assemblyman Park.

At the National Assembly audit held that day, Assemblyman Park said, "When I inquired with MOLIT to understand the status of low-interest loans for jeonse fraud victims, they said there were no statistics," adding, "Eventually, MOLIT received the data through the Financial Services Commission and submitted it." He then pointed out, "The Special Act on Jeonse Fraud was created centered on MOLIT, so shouldn't MOLIT be responsible for tracking the status of these loans?"

Meanwhile, the loan execution rate was low at 11.7% (2,194 cases). The total number of tenants recognized as victims of jeonse fraud was 18,810. MOLIT also did not compile related information regarding the low loan performance.

Assemblyman Park said, "There needs to be consideration on how to help victims of jeonse fraud, but if even the performance data is poorly managed, the effectiveness of this loan cannot be confirmed," adding, "The responsible agency, HUG, should be recommended by MOLIT to manage the performance well." This loan product allows jeonse fraud victims to borrow up to 400 million KRW at a low interest rate of 1.2% to 2.7% per annum.