Small businesses are delinquent...Guarantee agency subrogation payment record

As the number of small business owners unable to pay off bank loans on time has soared, the number of subrogation payments, in which guarantee agencies pay off their debts instead, has increased to a record high.

According to the data received by Kim Hyun-jung of the Democratic Party of Korea from the Korea Credit Guarantee Foundation, the amount of subrogation payments for general guarantees by the regional credit guarantee foundation increased by KRW 2.3997 trillion last year.

The figure is 40.1% higher than KRW 1.7126 trillion the year before, the largest ever.

Subrogation repayment refers to the payment of loans instead of the regional credit guarantee foundation, which provided guarantees for small business owners and others to borrow from banks.

The scale of subrogation has grown because small business owners and others have not yet recovered their capacity to pay back loans after significantly increasing loans since the COVID-19 pandemic.