Suhyup Central Federation faces scrutiny over rising delinquency and real estate loan focus

The Suhyup Central Federation is facing intense scrutiny from South Korean lawmakers regarding rising delinquency rates and a perceived shift away from its core mission of supporting fishermen. Data presented to the National Assembly's Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee reveals that the mutual finance delinquency rate rose to 6.82% as of late June, up from 5.72% at the end of last year.

A significant portion of the federation's financial activity is heavily concentrated in real estate mortgage loans, which accounted for 71.9% of the total loan balance of 90 cooperatives. This concentration has become a risk factor, as 91.4% of the total delinquent loan balance is tied to real estate collateral. In contrast, loans specifically for agricultural and fishery policy funds represent only 9.5% of the total balance.

While the Suhyup Central Federation aims to transition into a comprehensive financial holding company by 2030, critics argue this expansion comes at the expense of member cooperatives' stability. Twelve cooperatives are currently in a state of capital impairment, and 28 others are flagged as having potential insolvency risks. Lawmakers have called for improved risk management, better oversight of non-fishery sector loans, and a return to prioritizing financial support for the fishing industry.