A cooperative means a contract whereby two or more persons have agreed to carry out a joint undertaking to operate business jointly by making mutual contribution thereto. The contribution may be made in cash or in kind such as other property or labor service, or the legal entity established based on such contract (Article 703 of the Civil Code). The CG Cooperative is also a cooperative established by capital contribution from construction companies.
In Korea, the government is entitled to establish a cooperative to act as the bank for an industry based on a special law. The relevant cooperative provides financial/insurance business services to cooperative members (capital contributors) under the supervision and the management of the government.
The CG Cooperative has the characteristics of a financial institution established by private capital from construction companies in lieu of insufficient public finance in the course of national reconstruction after the Korean War, and of systemic support from the government.
CG Cooperative is the financial institution specializing in the construction industry, providing construction guarantee and loans for operators of construction business.
CG Cooperative is contributing to the development of the entire construction industry and economic growth, by financial support to construction companies and enhancement of confidence in construction contracts.
Applicable laws and regulations on which establishment of CG Cooperative is grounded
Applicable laws and regulations on which establishment of CG Cooperative is grounded Article 54, Chapter 7, of the Framework Act on the Construction Industry
(Establishment of Mutual-Aid Associations)
① Constructors may establish a mutual-aid association to engage in autonomous economic activities, and provide various guarantees, funds loans, etc. necessary to run construction businesses through mutual cooperative organizations between constructors.
Supervisory authority and Supervision standard Supervisory authority: Ministry of Land, Infrastructure and Transport, Financial Services Commission
Supervision standard: Article 65 and 65-2 of the Framework Act on the Construction Industry, Article 63-2 of Enforcement Ordinance of the same Act
(Maintenance, etc. of Financial Soundness of Construction Guarantee Institutions, such as Mutual-Aid Associations)
② The Minister of Land, Infrastructure and Transport shall establish standards necessary for supervising mutual-aid associations in order to provide guidance on the maintenance, etc. of financial soundness under paragraph (1) and publicly announce the standards: Provided, That in establishing the standards necessary for supervising mutual-aid associations, he/she shall publicly announce such standards after consultation with the Chairperson of the Financial Services Commission.