South Korea's New Leap Fund to buy 1 trillion won of delinquent bonds, easing debt for 108,000 borrowers

The Financial Services Commission announced that the New Leap Fund will purchase about 1.014 trillion won of long‑term delinquent unsecured personal loans held by four securitisation companies, including Sangnoksoo and K‑Bista, starting at the end of the month and completing the remaining purchases by the end of July. The acquisition will halt all collection activities immediately. Debts of basic‑livelihood recipients, severely disabled pensioners and other socially vulnerable households will be cancelled without a means‑test, benefiting roughly 108,000 people.

A full survey identified 167 securitisation firms holding 5.98 trillion won of delinquent bonds, of which 46 firms own the 1.572 trillion won targeted for relief (bonds under 50 million won and overdue for at least seven years). Sangnoksoo, K‑Bista and Genesis together own the majority of the targeted pool. The Fund will also consider case‑by‑case debt‑write‑offs for borrowers who lack repayment capacity, and will provide restructuring support where needed. The authorities said the operation will strengthen supervision of the distressed‑bond market and that they will monitor for overheating or excessive collection practices, ready to amend regulations if necessary.