[2025 Audit] Long-term Small-amount Delinquent Debtor Support Program Execution Rate at 1%

Only 1.1 Billion Won in Debt Written Off
8.1 Billion Won Spent Solely on Operating Expenses
Board and Auditor Unchanged for 8 Years
Heon-Seung Lee: "Prompt Liquidation Is Urgent"

The performance of the Long-term Small-amount Delinquent Debtor Support Program, a system that provides debt relief to debtors with principal amounts of 10 million won or less and delinquency periods of over 10 years, has been found to be poor.

According to data submitted by Heon-Seung Lee, a member of the National Assembly's Political Affairs Committee from the People Power Party, to the Long-term Small-amount Delinquent Debtor Support Foundation on October 23, the performance of the Long-term Small-amount Delinquent Debtor Support Program promoted by the Moon Jae-in administration was extremely lackluster. Furthermore, even after the program ended, the foundation was not liquidated and continued to spend only on operating expenses, revealing ongoing mismanagement.

In 2017, the Moon Jae-in administration announced measures to support long-term small-amount delinquent debtors, stating that out of about 1.59 million eligible individuals, 760,000 would have their debts, totaling 2.6 trillion won, written off through the foundation. In reality, only 9,462 debtors received support, which is just 1.2% of the initial estimate, and the amount of debt actually written off was only 36.5 billion won. Of the 106.1 billion won in contributions received from financial companies, only 1.086 billion won was actually used for debt write-offs, accounting for just 1% of the total contributions.

Heon-Seung Lee, Member of the People Power Party. Office of Heon-Seung Lee

The foundation has continued to operate without being liquidated even after debt write-off operations effectively ended in 2022, and it was found to have paid a total of 8.133 billion won to Korea Asset Management Corporation (KAMCO) as consignment management fees from 2018 to last year. These consignment management fees were paid as compensation for work performed to practically support the foundation's operations, covering labor costs, system operation expenses, and administrative costs.

Moreover, none of the five board members and one auditor of the foundation have been replaced since its establishment in 2018. All of them have served without pay and on a part-time basis, receiving an allowance of 400,000 won only when attending meetings. Heon-Seung Lee pointed out that there is practically no responsible oversight system in place. In this context, KAMCO and financial authorities are currently promoting a similar program called the 'New Leap Fund,' and it has been reported that Yang Hyuk-seung, the former chairman of the Long-term Small-amount Delinquent Debtor Support Foundation, is expected to be appointed as the head of the New Leap Fund corporation, raising concerns.

Heon-Seung Lee emphasized, "Only 1% of the debt was written off, yet the foundation continues to operate and spend on operating expenses even after the program ended. The foundation, which has shown no results, must be liquidated promptly to prevent any further waste of public funds." He added, "The New Leap Fund being promoted in the future must be based on transparent operations and responsible performance management."