The resumption of group loans, including mortgage loans and loans for interim payments, relocation costs, and final installment payments for unit purchases at the Korean Federation of Community Credit Cooperatives (KFCC), is expected soon. The Ministry of the Interior and Safety is fine-tuning the loan limit and plans to notify each cooperative of the loan restart through the KFCC as soon as internal consultations are completed.
According to the financial industry on the 27th, the Ministry of the Interior and Safety (MOIS) is finalizing the scale of lending with the goal of resuming halted mortgage loans and group loans as early as this week.
The Korean Federation of Community Credit Cooperatives (KFCC) suspended handling loans for interim payments, relocation costs, and final installment payments for unit purchases through group loans as of Feb. 19. It also halted new reviews for group loans and household loans through recruiting corporations and agents. In May, it banned new mortgage loans for nonmembers and blocked preferential interest rates on mortgage loans for both members and nonmembers.
Previously, managers at the Korean Federation of Community Credit Cooperatives (KFCC) could offer preferential interest rates within a certain range. When lending resumes, most of these restrictions are expected to be lifted.
Ahead of the resumption, the Ministry of the Interior and Safety (MOIS) is said to be adjusting interest-rate levels to prevent the offering of preferential rates from leading to excessive competition among local cooperatives or with other financial firms. At the same time, it is reviewing an appropriate scale to prevent a rapid increase in loan supply from heightening default risks.
The Financial Services Commission on the 13th raised this year's household loan total growth rate target from 1.5% to around 3%. Group loans will be managed separately from the overall household loan total. As a result, NongHyup and credit unions recently resumed group loan operations they had halted. An official at the Ministry of the Interior and Safety (MOIS) said, "We are preparing internally to ensure that issues such as losses do not occur after lending resumes."