North Korea not paying back its $875 mil. loan to South Korea [VIDEO]
North Korea has a huge amount of loans to pay back to South Korea, but chances of repayment seem to be very slim.
The South Korean government has offered more than trillion won in loan to North Korea, according to government data.
The loan, worth some $875 million, covers food loan, $130 million worth infrastructure loans for rail-highway contruction, and light industry materials such as clothes, shoes and soaps worth $80 million from 2000 through 2008.
Those loans were also executed by the Export-Import Bank of Korea.
The loan was given at an interest rate of 1% and the North promised to redeem it over 20 years following a 10-year grace period.
Of the total amount, only 0.2% ($2.3 mil.) has been collected. The payment was made in iron commodities.
The Export-Import Bank of Korea requested for 62 times in total that its North Korean counterpart repay the loans but there has been no response from North Korea.
The Unification ministry said the loans should be considered as a long-term investment to improve inter-Korean relations, but they will start negotiations to collect the unpaid loans as the circumstances improve.