The Korea Asset Management Corporation (Kamco) is evaluating a policy to exclude overseas emigrants who default on domestic debts from its debt-adjustment programs, citing a negligible recovery rate of under 1% over the past decade. As Kamco’s fiscal burden grows due to rising public debt, the state-backed agency aims to curb unrecoverable asset acquisitions.
The Bottom Line
- Exclusion Consideration: Kamco is reviewing plans to halt the acquisition of financial institution debts owed by individuals who have moved abroad without repaying obligations.
- Bleak Recovery Metrics: Data submitted to lawmaker Park Sung-hoon shows Kamco recovered just 0.9% (8억3800만원) out of 978억9600만원 across 2,071 overseas emigrant debt cases over the last ten years.
- Fiscal Pressure: The agency projects its debt-to-equity ratio will hit 351.6% by the end of the year, driven by expanding public support programs like the Saechulbal Fund.
Kamco Weighs Policy Shift on Overseas Defaulted Debt
The Korea Asset Management Corporation is reviewing a structural shift to exclude financial institution debts held by individuals who leave the country without settling their local obligations. Kamco operates as a state-backed entity tasked with acquiring long-term overdue and insolvent loans from domestic financial institutions to provide debt adjustment and rehabilitation support. Under the proposed review, debts belonging to overseas emigrants would remain with the originating financial institutions, which would then be forced to hand them over to private collection agencies rather than relying on state-led buyouts.
Current legal frameworks lack explicit provisions regulating uncollected debt when a debtor leaves the jurisdiction. While student loans mandate specific safeguards—such as signing repayment agreements prior to departure or securing a joint guarantor—general commercial and unsecured retail debt lacks equivalent overseas tracking mechanisms. This regulatory gap has left state-backed buyers absorbing assets that yield virtually no financial return upon resolution.
Ten-Year Recovery Data Highlights Structural Losses
Data provided by Kamco to the office of People Power Party lawmaker Park Sung-hoon reveals the financial scale of these cross-border defaults. Between 2016 and 2025, Kamco acquired 978억9600만원 in debt distributed across 2,071 overseas emigrants. Out of that total exposure, the agency successfully recovered only 8억3800만원, translating to a recovery rate of 0.9%.
Even within the distressed debt market where low recovery rates are standard, overseas emigrant portfolios underperform significantly. Kamco’s broader unsecured debt pool paints a slightly higher, yet still depressed, picture. Across 11조4121억원 in unsecured bad debt acquired between 2020 and August 2025, total recoveries reached 1209억원, marking a recovery rate of 1.1%.
Rising Public Liabilities and Medium-Term Fiscal Strain
The push to tighten debt acquisition criteria comes as Kamco faces mounting balance sheet pressures. The agency’s issuance of public bonds has accelerated to fund state-backed debt relief initiatives, most notably the Saechulbal Fund designed to assist struggling small business owners.
According to Kamco’s 2026–2030 mid-term financial management plan, the organization projects its debt-to-equity ratio will climb to 351.6% by the close of the year. This represents an increase of 117.3 percentage points compared to the previous period. A Kamco representative noted that managing debt for overseas obligors presents insurmountable practical hurdles, necessitating the review of non-acquisition strategies to protect public finances from further strain.
| Metric Category | Overseas Emigrant Debt (2016–2025) | General Unsecured Debt (2020–Aug 2025) |
|---|---|---|
| Total Acquired Amount | 978억9600만원 | 11조4121억원 |
| Total Recovered Amount | 8억3800만원 | 1209억원 |
| Recovery Rate | 0.9% | 1.1% |
| Affected Individuals / Scope | 2,071 Emigrants | Broad Unsecured Portfolio |
Future Outlook for Domestic Financial Institutions
If Kamco formalizes the exclusion of overseas emigrant debt, commercial banks and lenders will have to absorb potential write-offs directly or utilize private collection channels.
Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute financial advice.
