South Korea plans to retrieve part of special soft loans provided to local firms involved in economic cooperation with North Korea for the first time in five years, government officials said Wednesday.

Tapping into a state fund on inter-Korean cooperation, Seoul has provided loans with low rates to such companies to help them cope with financial troubles stemming from the South's punitive sanctions against the North in 2010. 

Local firms that had invested in projects and assets in North Korea are suffering from financial setbacks as Seoul has banned most inter-Korean trade following the North's fatal torpedoing of a South Korean warship in that year.

But the government said it has decided to collect part of such lending offered in 2010 as it would not further extend loan maturity to local firms which can repay debt with profits generated from other business. The special loans were also provided in 2012 and 2014.

"The government has decided to retrieve part of the loans to promote the soundness of the state fund," Jeong Joon-hee, spokesman at the Unification Ministry, told a regular press briefing.

He also added that a survey of their financial conditions showed that there are firms which are able to service debt.

The government said about 150 of a total 168 borrowers will be subject to the repayment of a combined 32.5 billion won ($28.1 million) in loans. The state inter-Korean cooperation fund stood at some 1 trillion won.

But the move would not be applied to both South Korean firms that have invested in an inter-Korean tourism program at Mount Kumgang in the North and those investing in inland areas of the North except the mountain and a joint industrial park in the border city of Kaesong.

Seoul is currently extending a loan maturity to those firms regardless of the repayment of principal.

Local firms on the list of loan collection expressed complaints against the government's decision.

"Almost every company that invested in North Korea is suffering from financial troubles. It is not fair that the government gives favor to them," said an official at one of such firms, asking not to be named.

Jeong said that the government believes it is fair that companies which can generate profits apart from their investment in the North repay debt. (Yonhap)