Public Institutions Hand Out Massive Low-Interest Loans to Employees Defying Government Guidelines

[Anchor]

It has been revealed that public institutions have been operating in-house loan programs that violate government guidelines. In particular, even agencies responsible for real estate affairs were found to be lending large sums of money to their employees at low interest rates. For ordinary citizens who struggle to use banks due to tightened lending thresholds, this inevitably causes a deep sense of relative deprivation.

This 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 provides employees with loans of up to 200 million won for purchasing homes, with an interest rate of 2.5% per annum and a repayment condition within 20 years.

This year, 13 people received loans totaling 1.9 billion won.

The problem is that this goes against government guidelines.

The Ministry of Economy and Finance set the per-person limit for public institution employee housing loans at 70 million won 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 set at 4.39% per annum or higher for this quarter.

An exhaustive 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 in-house loan programs in violation of the guidelines.

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

In the first half of this year alone, 15 people received 2.01 billion won in loans.

At LH, the main agency responsible for housing supply, the scale of loans provided under conditions more favorable than government guidelines reached 93 employees and over 7 billion won in the first half of this year.

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

[Lee Yong-jae / Yeonsu-gu, Incheon: It seems unfair that they block everything for others while lending money among themselves.]

In-house loans are not counted in the Debt Service Ratio (DSR), which also weakens the effectiveness of lending regulations.

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

Public institutions explained that "revising in-house loan regulations requires the consent of 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 since the score allocated to in-house loans is negligible, the effectiveness of the penalties needs to be enhanced.

(Photo: Yonhap News)
(Video reporting: 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.