Financial Services Commission (FSC) Chairman Lee Eog-weon on Dec. 8 attends a ceremony to mark the New Leap Fund's debt forgiveness at the auditorium KAMCO Maru of the Busan International Finance Center in Busan's Nam-gu District. (FSC)

By Koh Hyunjeong

Debt defaults worth KRW 1.1 trillion have been forgiven for 70,000 socially disadvantaged individuals.

The Financial Services Commission (FSC), New Leap Fund and Korea Asset Management Corp. (KAMCO) on Dec. 8 said they jointly hosted a ceremony to mark the fund's debt forgiveness program at the auditorium KAMCO Maru of the Busan International Finance Center in Busan's Nam-gu District. This event commemorated the first cancellation of long-term delinquent debts of vulnerable groups.

The fund is a bad bank launched in October to forgive debts up to KRW 50 million in default for over seven years.

Earlier, it acquired long-term delinquent debts worth KRW 6.2 trillion from some 420,000 borrowers in two previous installments. The ceremony saw the cancellation of KRW 1.1 trillion worth of debts held by 70,000 people including basic welfare recipients, severely disabled people and veterans.

About a half of the amount owed had been unpaid for 20-25 years and over 80% were KRW 30 million or less.

Through next year, the fund will purchase long-term debts that defaulted seven years ago or earlier from financial institutions. The expected acquisition amount of KRW 16.4 trillion is expected to help 1.13 million credit delinquents.

FSC Chairman Lee Eog-weon said, "Debt forgiveness is the first step toward restoring the virtuous cycle of our economy and raising the practice of respect for humanity and social solidarity."

hjkoh@korea.kr