The percentage of low-income, low-credit individuals who received policy loans and failed to repay them, leading to policy institutions covering the repayments, has doubled over the past year. The Sunny Loan Bank supports low-income, low-credit individuals to utilize first-tier financial institutions by improving their liability or credit conditions through its bridging policy finance products.
According to data submitted on the 30th by the Korea Inclusive Finance Agency to Rep. Kim Hyun-jung of the Democratic Party, who is a member of the National Assembly's National Policy Committee, the substitute repayment rate for the Sunny Loan Bank stood at 16.8% at the end of December last year. Compared to the end of 2023 (8.4%), it has increased to twice that level. The substitute repayment rate refers to the percentage of the amount paid back to the banks by policy institutions, such as the Korea Inclusive Finance Agency, when borrowers fail to repay the principal.
The substitute repayment rates for policy finance products aimed at vulnerable groups, whose repayment capabilities are further declining, are also increasing. The substitute repayment rate for Sunny Loan 15, a policy finance product supporting the lowest credit borrowers, rose from 21.3% at the end of 2023 to 25.5% at the end of last year. The substitute repayment rate for the lowest credit special guarantees, which are loans provided to borrowers in the bottom 10% of credit scores who were rejected during the Sunny Loan 15 evaluations, nearly doubled during the same period, increasing from 14.5% to 26.8%.