![Number of reports on illegal policy fund brokers [Source: Ministry of SMEs and Startups, ChatGPT generated image]](https://image.ajunews.com/content/image/2026/05/28/20260528183007206120.jpg)
Reports of illegal brokers exploiting government policy fund support have surged, but most cases are either treated as simple complaints or lack sufficient evidence for further action. The Ministry of SMEs and Startups has initiated a reward system for whistleblowers, yet it faces a paradox: it lacks the authority to confirm the outcomes of investigations, leaving it unaware of any resulting penalties.
According to the Ministry of SMEs and Startups, from January to May 26 of this year, the "Illegal Policy Fund Broker Reporting Center" received a total of 432 reports. This figure is more than six times the 70 reports filed in the entire previous year when the center was not operational.
Of the reports processed, 373 (86.3%) were handled as "self-processing" (simple tips, warnings, or insufficient evidence), 21 (4.9%) were under investigation, 31 (7.2%) were classified as simple complaints, and 1 (0.2%) was referred to the Financial Supervisory Service. Only 6 cases, or 1.4% of the total, resulted in investigations that led to rewards. Among these, 4 involved small business victims and 2 involved cases from larger enterprises.
The cases that received rewards involved demands for upfront fees and deposits under the pretense of guaranteeing or confirming policy fund loans, as well as instances of impersonating government agencies to send forged documents.
However, the low number of cases referred for investigation compared to the total reports suggests that many submissions lack concrete evidence and are merely complaints. Additionally, the Ministry's authority is limited to referrals, making direct enforcement challenging. In response, the Ministry is considering measures to directly address third-party misconduct related to illegal brokers under the Small and Medium Enterprises Promotion Act and other relevant laws.
A Ministry official stated, "Previously, when we referred cases to the police, we did not receive updates on the outcomes. However, with the upcoming legal amendments, the Ministry will be able to participate in the entire investigation process, from the inquiry stage to the final results, granting us more direct enforcement powers."
Earlier this year, the Ministry implemented a reward system offering up to 2 million won for whistleblowers and a self-reporting amnesty program to combat illegal brokers. Additionally, it is enhancing guidance in collaboration with private platforms like 'Soomgo' and 'Kreamong' to prepare for illegal proposals during policy fund applications.
The total scale of policy funds for this year amounts to 7.7933 trillion won, including 4.4313 trillion won for small and medium enterprise policy funds and 3.3620 trillion won for small business policy funds.
* This article has been translated by AI.
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