New Leap Fund Completes Second Round of Long-Term Delinquent Bond Purchases
Acquires 800 Billion Won Involving 76,000 Individuals
Only 8 Out of Top 30 Lending Companies Have Joined the Agreement
Regulations Revised to Allow Bank Loans for Participating Companies
Currently Limited to Recognized Excellent Lenders
On October 1, the "New Leap Fund Launch Ceremony" was held at the Press Center in Jung-gu, Seoul. Eokwon Lee, Chairman of the Financial Services Commission, delivered a congratulatory speech at the launch ceremony. 2025.10.01 Photo by Dongju Yoon
The public bad bank "New Leap Fund," which writes off long-term delinquent debts of 50 million won or less that have been overdue for more than seven years, has completed its second round of purchases of long-term delinquent bonds. For the first time, this round included the purchase of long-term delinquent bonds from lending companies. To encourage greater participation from such companies, the government plans to introduce incentive measures, such as allowing them to borrow from banks upon joining the agreement.
On November 27, the Financial Services Commission announced that the New Leap Fund had completed its second purchase of long-term delinquent bonds, acquiring 800 billion won worth of assets (involving 76,000 individuals) held by Korea Asset Management Corporation (KAMCO) and the National Happiness Fund. The New Leap Fund is a public bad bank that supports financial recovery through debt adjustment or write-offs. It was established to purchase the bonds of long-term delinquent borrowers who have lost repayment capacity and to halt collection efforts.
Once the fund acquires the bonds, collection efforts are immediately suspended. Among the purchased bonds, debts owed by vulnerable groups such as recipients of basic livelihood support and people with severe disabilities will be written off by the end of the year without separate review. For other bonds, if the debtor's repayment capacity is lost to a degree comparable to personal bankruptcy, the debt will be written off within a year. Debtors with significantly insufficient repayment capacity will go through a debt adjustment process.
Although today marks the first time the New Leap Fund has purchased delinquent bonds held by lending companies, only 8 out of the top 30 lending companies (based on holdings of long-term delinquent bonds) have joined the New Leap Fund agreement so far.
The Financial Services Commission plans to continue promoting incentives to encourage more lending companies to join the agreement. In other sectors, bonds are sold according to each sector's sales schedule, and bulk sales are the principle.However, lending companies may sell bonds according to their preferred regular sales schedule,and if sequential sales are necessary, the fund will provide maximum support.
Additionally, incentives will be offered to allow lending companies that join the New Leap Fund agreement to borrow from banks. Currently, banks only provide loans to lending companies recognized for excellence in inclusive finance. The Financial Services Commission will support lending companies participating in government debt adjustment programs (the New Leap Fund and the New Start Fund) by revising internal regulations and procedures to allow them to obtain bank loans.
Meanwhile, the New Leap Fund plans to make additional purchases of long-term delinquent bonds held by credit card companies, non-life insurers, savings banks, and lending companies in December. After that, it will continue to regularly acquire long-term delinquent bonds from financial companies and public institutions.
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