More trade finance funds are deferring redemption in South Korea as collecting accounts receivable becomes increasingly difficult due to pandemic-related disruptions.

Singapore Trade Finance Fund No. 14, run by Fidelis Asset Management, was scheduled to redeem the money to investors in early June but pushed back the date to later this year, according to industry sources on Wednesday.

The fund invested in confirmed accounts receivable that commodity buyers owed Singapore-based trading firm Apies. The product promised an annual yield of 5 percent and gained popularity as a secure investment, with Korea Investment & Securities and other local brokerages drawing 13 billion won ($10.8 million) worth of sales.

But Apies, which had not seen a single default on its receivables since its establishment in 2011, soon found itself awash with deferments in the wake of the coronavirus pandemic as distressed buyers failed to meet their payment schedules.

The fund was originally set to expire in one year, with six months added to settle insurance claims. It started selling in Korea in late May 2019, which means it has until the end of this year to carry out the redemption. Some have accused Korea Investment & Securities of misleading investors, informing them that the fund’s maturity is just one year instead of a year and a half.

Weakening trading activity from the ongoing pandemic has prompted other local trade finance funds to freeze their assets.

The KB Able DLS TA Insurance Trade Finance Fund, issued by NH Investment & Securities and sold by KB Securities, recently suspended withdrawals. The Platform Asia Trade Finance 1Y fund by Platform Partners also pushed back its maturity date.

By Kim Je-lim and Kim Hyo-jin

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