Saemaul Geumgo resumes group loans after 6-month suspension

Saemaul Geumgo has resumed group lending, which it suspended roughly six months ago as part of household loan management efforts.

The mutual finance cooperative began accepting new applications Thursday for group loans, including relocation loans, interim payment loans and balance payment loans, according to financial industry sources.

The cooperative also lifted its ban on processing group loans through loan brokers. Restrictions on mortgage lending to non-members will likewise be eased for relocation, interim payment and balance payment loans.

The move follows the government's recent real estate measures, which raised the financial sector's household debt growth target for this year from 1.5 percent to 3 percent and excluded group loans from the per-institution household lending cap.

Saemaul Geumgo had struggled to manage household lending last year, leaving it with virtually no room to expand such loans further this year. As previously approved group loans were disbursed in stages, the pace of loan growth accelerated, prompting the cooperative to restrict new originations.

Starting Feb. 19, Saemaul Geumgo halted new group loan originations — including relocation, interim payment and balance payment loans — as well as household lending through brokers, in line with the government's household debt management policy. In May, it also restricted mortgage lending to non-members, including those who had held membership for less than one year.

Other mutual finance institutions are also moving to ease group lending restrictions. Credit unions lifted their ban on new group loan screening Monday and resumed broker-assisted lending for mortgage-backed group loans.

Meanwhile, the five major banks all expanded their lending limits for balance payment loans tied to the DIH Bangbae development. Per-bank caps, previously set at around 100 billion won ($72.2 million), were raised to between 200 billion and 400 billion won.