About us
The Saedo Yak Fund is a debt restructuring and relief initiative spearheaded by the Lee Jae-myung administration, under which the government acquires non-performing loans from financially vulnerable individuals—particularly those with long-term delinquencies or limited repayment capacity—and provides principal reductions and repayment deferrals.
Designed as a form of public relief, the program aims to help low-income borrowers who have been unable to repay their debts for over seven years re-enter economic activity. By clearing long-term delinquent debt, the fund seeks to facilitate financial recovery for these individuals.
The fund is managed by Korea Asset Management Corporation (KAMCO) and is capitalized with 400 billion won ($308 million) from government coffers and 440 billion won ($339 million) in contributions from the financial sector. The acquisition of bad loans began in October and will proceed sequentially by sector over the course of one year.
Eligibility for the Saedo Yak Fund is limited to unsecured borrowers with long-term delinquencies (over seven years) and debts of 50 million won ($38,500) or less. The loans must be held by financial institutions or public agencies. Debts related to gambling, adult entertainment, or held by foreigners are excluded from support.
Borrowers with incomes below 60% of the median and no assets beyond basic living necessities are eligible for full debt cancellation. Others may receive principal reductions of 30–80%, up to 10 years of installment repayment, and full interest waivers.
The fund operates by bulk-purchasing eligible loans from participating financial institutions, eliminating the need for individual applications from debtors.
According to financial authorities, the Saedo Yak Fund is expected to purchase up to 16.4 trillion won ($12.6 billion) in long-term delinquent loans, benefiting approximately 1.134 million individuals.
(Seoul=Yonhap Infomax) Hyun Jung Lee
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