[2025 Audit] "KAMCO Still Unable to Resolve Over 20,000 Non-Performing Loans from IMF Financial Crisis"

It has been revealed that there are still around 18,000 individual debt cases from the non-performing loans generated during the financial crisis that remain unresolved more than 20 years later.

According to data submitted by Assemblyman Park Chan-dae of the Democratic Party of Korea, a member of the National Assembly’s Political Affairs Committee, from Korea Asset Management Corporation (KAMCO), as of the end of August this year, 21,433 cases (worth 1.7704 trillion won) out of the 228,293 non-performing loans (totaling 5.1577 trillion won) acquired by KAMCO in 2000 remain outstanding. Of these, 18,010 are individual debts (366.2 billion won), while 3,423 are corporate debts (1.4042 trillion won).

KAMCO has resolved 90.6% of the acquired debts through methods such as debt restructuring, legal action, or write-offs. However, the remaining cases have yet to be resolved even after 25 years. The unresolved debts include cases currently undergoing debt adjustment, personal rehabilitation, or bankruptcy discharge procedures.

Until recently, KAMCO has extended the statute of limitations on these debts in 10-year increments, except in exceptional cases where the debtor is unable to repay, in accordance with existing limitation management regulations. The currently remaining delinquent debts appear to have had their statutes of limitations extended two to three times.

This month, the government launched the New Leap Fund, a bad bank that purchases long-term delinquent debts that have been overdue for more than seven years and are worth less than 50 million won. The New Leap Fund purchases eligible delinquent debts in bulk to support those who have lost repayment capacity, and then proceeds with either write-offs or debt restructuring based on the debtor’s ability to repay.

The fund plans to sequentially purchase debts eligible for write-off from public institutions and financial companies, and some of the debts overdue for more than 25 years are expected to be included. Individual debts account for 84% of all debts held. However, around 3,000 corporate debts are not eligible for purchase by the New Leap Fund, which targets individuals. While joint guarantors of corporate debts may be classified as individuals, the size of corporate debts often exceeds 50 million won, making actual purchases unlikely.

Assemblyman Park stated, "There is a need to support debtors so that they can rejoin economic activities," and added, "The New Leap Fund should actively consider including long-term debts generated during the IMF crisis."