Saemaul Geumgo is accelerating its recovery in financial soundness. Amid ongoing burdens from loan loss provisions due to a sluggish real estate market, the organization aims to reduce losses through the management of non-performing loans (NPLs) and operational efficiency, with a goal of returning to profitability by 2028.
According to the Saemaul Geumgo Central Association on August 20, 2026, the 1,251 Saemaul Geumgo branches across the country sold a total of 3.4783 trillion won in non-performing loans in the first half of this year.
Of this amount, 3.1881 trillion won was sold through MG Asset Management Company (AMCO), which specializes in managing non-performing loans and was established in July of last year. The remainder was handled through NPL funds, the Korea Asset Management Corporation (KAMCO), and asset securitization.
As the cleanup of non-performing loans has intensified, the delinquency rate has begun to decline. The delinquency rate for Saemaul Geumgo rose to 8.37% at the end of June last year but fell significantly to 5.08% by the end of last year.
Saemaul Geumgo is also collaborating with the financial sector to address non-performing loans. In May of last year, it established a 2.172 trillion won NPL fund with four regional banks, including Busan Bank and Gwangju Bank. This initiative aims to resolve troubled businesses held by Saemaul Geumgo and regional banks by next year. In December of last year, it formed a mutual finance NPL fund worth 1.325 trillion won with the National Credit Union Federation of Korea, which will be operational until the end of this year.
As a result, the scale of losses for the first half of this year is expected to improve significantly compared to the same period last year, which saw losses of 1.3287 trillion won. Although over 1 trillion won in additional loan loss provisions were set aside in response to the real estate downturn, the effects of the non-performing loan cleanup are anticipated to contribute to a reduction in the scale of losses.
Restructuring efforts are also gaining momentum. In the first half of this year, Saemaul Geumgo merged 21 credit unions and aims to merge a total of 51 credit unions by the end of the year. This marks a significant acceleration compared to the seven mergers completed in the first half of last year. While the number of credit union entities will decrease due to these mergers, the branches of the merged credit unions will continue to operate in branch form to maintain financial accessibility.
A representative from the Saemaul Geumgo Central Association stated, "Saemaul Geumgo is fully committed to managing its financial soundness to restore trust both internally and externally. We will do our utmost to fulfill our role as a community and microfinance institution and to become a trusted financial organization."
* This article has been translated by AI.
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