Business · Companies · 2 hrs ago
Only 840 million won recovered from guarantees to 227 failed firms
At a South Korean parliamentary audit, lawmaker Choi Soo-jin questioned how the Technology Finance Corporation screened its borrowers.
From 2020 to August 2026, 227 firms closed or changed control within a year of receiving the corporation’s guarantee.
The guarantees totalled 31.4 billion won, but only 840 million won was recovered, about 2.7% of the amount.
The corporation provides guarantees that help businesses borrow, and it may have to repay lenders when firms default.
It also repaid about 1.5 trillion won in defaults last year and about 1 trillion won through August this year, according to figures raised at the audit.
The corporation’s president said the early business failures pointed to a serious problem and promised stronger screening and follow-up checks.
He agreed to prepare specific measures and report them back to the lawmaker.
A total of 840 million won was recovered from guarantees linked to 227 firms that closed or transferred control within a year of receiving guarantees from the Korea Technology Finance Corporation.
The firms’ guarantees amounted to 31.4 billion won, producing a recovery rate of about 2.7%.
The figures cover the period from 2020 through August 2026.
At a parliamentary audit, lawmaker Choi Soo-jin questioned the corporation’s guarantee screening and follow-up management.
Corporation chairman Kwon Hyung-taek acknowledged the issue and pledged stronger screening and monitoring.
- Who
- The Korea Technology Finance Corporation, 227 firms, lawmaker Choi Soo-jin and corporation chairman Kwon Hyung-taek.
- What
- Only 840 million won was recovered from 31.4 billion won in guarantees linked to 227 firms that closed or transferred control within a year.
- When
- The data cover 2020 through August 2026. The issue was raised at an audit on October 15.
- Where
- At a parliamentary audit of agencies under South Korea’s Ministry of SMEs and Startups.
- Why
- Choi questioned whether guarantee screening and follow-up management had been adequate.
This story does not have two clearly opposing sides.
227 firms closed or transferred control within a year of receiving guarantees from the corporation.
Choi raised concerns about guarantee screening and follow-up management at a parliamentary audit, and Kwon pledged stronger measures.
- Firms
- 227
- Guarantee amount
- 31.4 billion won
- Recovered
- 840 million won
- Recovery rate
- About 2.7%
- Time period
- 2020 through August 2026
- Subrogation payments
- About 1.5 trillion won in 2025 and about 1 trillion won through August 2026
1 source
What people are saying
How can a company close within one year immediately after it has been screened?
As you pointed out, it is a big problem that there was a major change in management control within one year.
We will strengthen direct interviews with business owners and investigations during guarantee screening, and more thoroughly check compliance with responsible management agreements after providing guarantees to prevent insolvencies.