The government will expand the supply of public financial services for low-income households this year from the previous 10.8 trillion won to 11.8 trillion won, an increase of 1 trillion won.
On the 28th, the government held a meeting to review the people's economy and discussed agenda items related to the expansion of public financial services for low-income households. The financial authorities noted that they would increase the supply of "Sunshine Loan Youth" by 100 billion won, supported by government lottery funds, and expand the supply of "illegal private loan prevention loans" by 100 billion won by injecting additional budget from the Korea Financial Services Agency.
"Illegal private loan prevention loans" have been renamed from "small amount living expense loans." This change is intended to better reflect the policy's objective of preventing individuals from being pushed into illegal private loan situations due to the inability to find a few hundred thousand won. This product targets low-credit and low-income individuals with a credit score in the bottom 20% and an annual income of 35 million won or less, allowing them to borrow up to 1 million won on the same day even if they are in arrears.
Also, to support businesses that have diligently implemented debt adjustment procedures for over six months, there are plans for banks to supply 600 billion won through a newly created product called "Sunshine Loan 119." The supply target for "New Hope Seed" has also been increased by 125.3 billion won. Unlike the products supplied and managed by the Korea Financial Services Agency, "New Hope Seed" is a personal credit loan product operated by banks using their own funds. Additionally, there are plans to increase the supply of the business "Sunshine Loan," guaranteed by credit guarantee foundations, by 150 billion won.
The financial authorities announced that they would supply about 60% of the major public financial services for low-income households in the first half of this year ahead of schedule. Kim Jin-hong, Director General of the Financial Consumer Bureau, said, "While the reimbursement rate of public financial service products has increased, making management more difficult, we plan to focus on supplying them at increased speed in the first half of this year," and added that "we will manage the performance results monthly to ensure that supply proceeds smoothly."
In addition, the government will revise the "Bridge Loan" program to enable responsible repayment participants to use bank credit loans. Kim noted, "Although the Bridge Loan was released a long time ago, its performance has been very poor, with annual execution amounts being several hundred million won," and said, "We will improve the process by verifying individuals through examinations and recommending them to banks." Moreover, information about responsible repayers will be shared not only with credit rating agencies but also within the financial sector, so it can be utilized in financial institution loan assessments.