Property secures 84% of the loans at Korea's farm and fishery credit cooperatives

The overdue money at the agricultural cooperatives sits almost entirely in one column. Delinquent property loans of 20.2 trillion won against a 339.2 trillion won property book give a delinquency rate of about 6.0% ^[12], while the remaining 0.87 trillion won of arrears, spread across 61.5 trillion won of all other lending, comes to about 1.4% ^[13]. Property loans there are going bad at roughly four times the rate of everything else ^[14]. The fisheries cooperatives show the same ratio from a higher base, with their non-property loans overdue at about 2.2% ^[15].

Farm and fishery policy loans at both groups add up to 19.2 trillion won, about 4.4% of the combined book ^[16]. The property book is about 19 times that size ^[17]. Its overdue slice alone, 22.4 trillion won across both systems ^[18], is about 3.2 trillion won larger than every policy loan the two hold ^[19].

The labels need care, or rather the overlap between them does. "Property-backed" describes the collateral and "loans to farmers and fishers" describes the borrower, so a farmer who pledges land can sit in both columns. At the agricultural cooperatives the two categories add up to 433.5 trillion won against a 400.7 trillion won book, so at least 32.8 trillion won of property-backed credit went to farmers ^[20]. The figures Yoon analyzed, submitted by the two federations, do not show whether the pledged property is farmland or urban buildings, and they cover a single date, the end of August ^{[1] [2]}.

Yoon, a Democratic Party member of the National Assembly's agriculture and fisheries committee ^[2], said the credit operations "have become nothing more than property lending shops and have forgotten their duty" ^[9]. I think he is right about the risk and overstates the purpose. A lender whose recoveries depend on collateral values is a property lender in credit terms, whoever the borrower is. But a property-backed loan to a farmer is still farm credit of a kind, for a system set up to support farming and fishing ^[11].

Two paths fit these figures. Property prices hold, and the arrears are worked down slowly inside a book that keeps its shape. Or prices fall, and delinquency rises across the 84% of the book that already holds most of the arrears ^[1]. The case that these are property lenders would be wrong if most of the collateral turned out to be members' farmland, whose price need not track the wider property market, or if property delinquency fell while the property book shrank.