Starting on the 22nd, support for low-income and socially vulnerable groups under the New Start Fund, a debt-adjustment program for small business owners and the self-employed, will be strengthened.
On the 18th, the Financial Services Commission held a meeting of New Start Fund partner institutions, chaired by Vice Chairman Kwon Dae-young, to discuss improvement measures.
First, the scope of those eligible for the New Start Fund will be expanded. The eligible business operation period for small business owners and the self-employed was widened from "between April 2020 and November 2024" to "between April 2020 and June 2025."
Support for low-income and socially vulnerable groups will also be strengthened. For unsecured debt held by low-income delinquent borrowers with total debt of 100 million won or less, the grace period and repayment period will each be extended from the current maximum of 1 year and 10 years to "3 years and 20 years." The principal reduction rate will be raised from up to 80% to 90%.
To provide swift support, the procedure for "brokered debt adjustment" will also change. Previously, the New Start Fund purchased dissenting claims from the original creditor and then executed a debt-adjustment agreement, delaying the agreement. Going forward, if even one of the claims for which New Start Fund debt adjustment is requested is approved, a debt-adjustment agreement will first be concluded for all applied claims, and the claim purchase will proceed after the agreement.
If 50% or more of the creditors agree, dissenting claims will also remain with the original creditor without being purchased by the New Start Fund. This measure aims to conserve New Start Fund resources and reduce inconvenience for debtors.
Vice Chairman Kwon said, "The dissent rate remains high in brokered debt adjustment," urging partner institutions to cooperate from a perspective of mutual growth and calling on the lending industry to fulfill its social responsibility as providers of finance for low-income residents.
In addition, starting in October, the New Start Fund will be linked and guided alongside other programs such as policy finance (Smile Loans, etc.), employment (National Tomorrow Learning Card, etc.), and welfare (basic livelihood benefits, etc.), allowing small business owners and the self-employed to apply for the New Start Fund more conveniently.