Public Agencies Flout Guidelines to Provide Massive Low-Interest Loans to Employees

[Anchor]

It has been revealed that public agencies have been operating internal loan programs that violate government guidelines. In particular, even institutions in charge of real estate duties were lending large sums of money to their employees at low interest rates. For ordinary citizens who face high barriers to borrowing and struggle to use commercial banks, this naturally causes a deep sense of relative deprivation.

Here is a report by Jeon Hyeong-u.

[Reporter]

The Korea Housing & Urban Guarantee Corporation, an affiliate of the Ministry of Land, Infrastructure and Transport that handles housing-related guarantees and policy projects.

It lends up to 200 million won to employees for purchasing homes at an annual interest rate of 2.5%, with repayment conditions within 20 years.

This year, 13 employees received 1.9 billion won in loans.

The problem is that this goes against government guidelines.

The Ministry of Economy and Finance set the limit for public agency employee housing loans at 70 million won per person back in 2021.

The interest rate must be equal to or higher than the bank household loan rate announced by the Bank of Korea, which is 4.39% per annum or higher based on this quarter.

A full inspection of 30 public institutions under the Ministry of Land, Infrastructure and Transport revealed that the Korea Housing & Urban Guarantee Corporation, the Korea Real Estate Board, and the Korea Land and Housing Corporation (LH) have been operating internal loan programs in violation of the guidelines.

The Korea Real Estate Board offers up to 140 million won for housing funds at a 2.2% annual interest rate for up to 15 years.

In the first half of this year alone, 15 employees borrowed 2.01 billion won.

At LH, the main agency responsible for housing supply, the scale of loans provided to employees on terms more favorable than government guidelines reached 7 billion won across 93 employees in the first half of this year.

Ordinary citizens, who find it difficult to get loans from banks due to the government's tightened management of household debt, feel a sense of deprivation.

[Lee Yong-jae / Yeonsu-gu, Incheon: Blocking everything they can block while giving out loans among themselves feels a bit unfair.]

Internal loans are not counted in the Debt Service Ratio (DSR), which also weakens the effectiveness of loan regulations.

[Kang Dae-shik / National Assembly Land, Infrastructure and Transport Committee (People Power Party): Housing loans that are more favorable than government standards continue to persist within public institutions. I think the Ministry of Land, Infrastructure and Transport must conduct a full investigation and immediately improve the system.]

Public agencies explained, "Amending internal loan regulations requires consent from the labor union, which has delayed the application of the guidelines."

While violating the guidelines can result in penalty points in management evaluations, critics point out that the score weight related to internal loans is minimal, meaning the effectiveness of the penalties needs to be raised.

(Camera Reporter: Lee Moo-jin, Lim Woo-shik | Video Editing: Kim Ho-jin, Design: Kim Ye-ji)
※ Please note: This article was translated by AI and may contain errors.