The Korea Association of Lend Finance (Chairman Jeong Seong-ung) announced on the 21st that the revised 'Act on Registration of Lend Business and Protection of Financial Users' (hereinafter referred to as the 'Lend Business Act'), which will take effect on the 22nd, will clarify the distinction between institutional lend finance and illegal private finance.
The association has delivered the contents of the Lend Business Act revision to relevant agencies, including the Korean National Police Agency and the courts, and officially requested that the term 'illegal private finance' be used for unregistered illegal loan operations in the future.
In the past, when illegal cases related to lend operations occurred, the term 'illegal lend business' was commonly used regardless of registration status. As a result, the public has found it difficult to clearly distinguish between formally registered 'lend businesses' and 'unregistered lend businesses' that operate illegally.
Such mixed terminology has led to the misinterpretation of even registered lend businesses as 'illegal lend businesses,' ultimately creating adverse effects that result in financially vulnerable groups opting for illegal private finance.
The key point of this revision of the Lend Business Act is the clear change of the term 'unregistered lend business' to 'illegal private finance.' It is expected that this will reduce confusion regarding the distinction between institutional lend businesses and illegal private finance, and improve public perception of registered lend businesses.
The association has made various efforts to promote the healthy image of institutional lend businesses, but it has struggled due to the fixation of the term 'illegal lend business.' This revision is expected to reduce misunderstandings about institutional lend businesses and further strengthen their role as a sound financial channel for ordinary citizens.
Jeong Seong-ung, chairman of the Korea Association of Lend Finance, said, "The distinction between registered lend businesses and illegal private finance is unclear, leading to adverse selection issues where financially vulnerable individuals utilize illegal private finance," and noted, "In the future, the association will work to improve the image of lend businesses through changes such as brand alterations, establishing a foundation so that financially vulnerable groups can confidently use institutional lend finance."