Gyeonggi Province Conducts On-Site Inspections of Private Loan Companies, Uncovers 180 Violations Including Incomplete Contracts

Inspection Period and Coverage Expanded Compared to Last Year
Gyeonggi Province Conducts On-Site Inspections of 360 Registered Private Loan Companies

Gyeonggi Province announced on the 17th that it had conducted on-site inspections of 360 registered private loan companies, uncovering a total of 180 violations, including failure to properly complete loan contracts.

Gyeonggi Provincial Government Building. Provided by Gyeonggi Province

This inspection was carried out over 40 days from April 7 to May 16, targeting 360 companies, which is 25% of the 1,439 registered private loan companies in the province. Compared to last year, both the inspection period (increased from 30 to 40 days) and the coverage (expanded from within 20% of all companies to within 30%) were increased. The joint inspection team included financial cooperation officers dispatched from the Financial Supervisory Service, provincial officials, and city and county officials, and was conducted in seven cities and counties, including Namyangju.

The main violations detected included: improper completion of loan contracts (such as missing interest rates or repayment periods), omission of mandatory phrases in loan advertisements, failure to post loan terms as required, failure to register changes in required information, and violations of the prohibition on excessive lending (such as not verifying income or debt).

As a result of the joint inspection, administrative actions included: 87 cases of registration cancellation due to unknown business locations or voluntary closure, 1 case of business suspension due to noncompliance with inspection guidance, 15 cases of fines for failing to comply with advertising standards, and 77 cases of administrative guidance for issues such as inadequate posting of loan terms or incorrect completion of status reports.

In particular, Goyang City imposed a three-month business suspension and a fine of 5 million won on a company that refused to comply with the on-site inspection. Anyang City imposed a fine of 1 million won on another company for violating the obligation to retain original loan contracts. In Bucheon, Gimpo, and other cities, multiple cases of advertising requirement violations and failure to fulfill posting obligations were identified.

To enhance the effectiveness of the first half inspections this year, Gyeonggi Province provided pre-inspection training for city and county officials in charge of private loan businesses and strengthened on-site inspections by operating a provincial inspection team, including financial cooperation officers from the Financial Supervisory Service.

Kim Gwangdeok, Director of Regional Finance at Gyeonggi Province, stated, "We expanded the inspection period and coverage to encourage sound operations among private loan companies and prevent harm to residents. The results of this inspection will be actively reflected in the compliance training materials for private loan companies in the second half of the year." He added, "We will continue to monitor and guide against illegal and unsound lending practices to further strengthen the financial safety net for our residents."