A loan based on the concept of "credit buildup" will be launched to lower the lending rate and raise the limit for low-credit borrowers who have faithfully repaid policy-based inclusive finance. A low-interest livelihood loan will also be prepared for young people who are high school graduates or unemployed.
Lee Eog-weon, chair of the Financial Services Commission (FSC), said on the 19th during a presidential policy briefing, "We will establish a system that allows people to settle into the formal financial sector and become self-sufficient when they faithfully repay policy-based inclusive finance," and stated accordingly.
Credit buildup is a scheme that lends small amounts to low-credit borrowers and, if they repay faithfully, lowers the rate and increases the limit. For example, it first lends 1 million won, and if the borrower repays, the next time it lends 2 million won at a lower rate.
The Financial Services Commission (FSC) will pursue credit buildup through the policy product "illegal private lending prevention loan (formerly small emergency living expense loan)." If this loan is fully repaid, it will support the "livelihood loan for financially vulnerable groups," lowering the rate from 6.3% per year to 4.5% per year and raising the limit from 1 million won to 5 million won. If the livelihood loan for financially vulnerable groups is faithfully repaid, the government will support access to Bridge Loan, a bank credit loan.
A Smile Microcredit youth product to support funds for young people such as high school graduates and the unemployed to prepare to enter society will also be piloted in the first quarter of next year. The rate is 4.5% per year, with loans up to 5 million won.
A tax-exempt "Youth Future Savings" product that supports government matching contributions to youths' deposits and offers preferential benefits to employees of small and midsize enterprises and small business owners will also be launched in June next year. The standard type offers a 6% annual rate, and the preferential type offers a 12% annual rate. The maturity is three years, and the monthly contribution limit is 500,000 won.
The Financial Services Commission (FSC) also decided to launch a restart support card (debit card) for low-credit borrowers such as those undergoing debt adjustment, with a postpaid transit function (monthly limit of 100,000 won). To strengthen financial education, the subject "finance and economic life" will be introduced as a regular elective in high schools, and next year, in areas without bank branches, it plans to allow people to sign up for deposits and loans at places such as post offices.