Borrowers who have faithfully repaid policy inclusive finance will be able to obtain Bridge Loan, a bank-sector unsecured credit product for low-income borrowers, more easily than now.
The Korea Federation of Banks and Korea INclusive Finance Agency (KINFA) said on the 24th they will completely overhaul how Bridge Loan support is provided for faithful repayers of policy inclusive finance.
Bridge Loan is a bank credit product for users who have faithfully repaid policy inclusive finance products. There had been criticism that eligibility was limited and procedures were complicated.
The Korea Federation of Banks will allow users who have faithfully used policy inclusive finance for at least two years, or who used it for at least six months and repaid the full principal and interest within the past three years, and are selected through the "inclusive finance integrated credit scoring model," to apply for linkage to Bridge Loan. Previously, the target was users who had repaid at least 75% without arrears for two years or more.
Eligible policy inclusive finance products include Workers Sunshine Loan, Sunshine Loan Youth, Sunshine Loan Bank, Sunshine Loan 15·17, special guarantee for the lowest credit tier, and SaeHope Seed loan. Faithful repayers of "Smile Microcredit livelihood funds for the financially vulnerable," to be newly established in the first quarter of next year, are also supported.
Procedures will also be simplified. To improve the convenience of using Bridge Loan, applicants can check eligibility in real time within the "Inclusive Finance Itda" application (app). A "Bridge Loan dedicated platform" will also be operated to handle, in one stop, checking available banks and submitting loan applications.
Previously, users had to issue a faithful repayment certificate and apply directly at a bank, but going forward, if they apply for Bridge Loan linkage support in the "Inclusive Finance Itda" app, they will not need to submit separate documents. Detailed terms such as the loan limit and interest rate will be applied differentially according to each bank's internal review results. The banking sector will implement the Bridge Loan overhaul in the first quarter of next year after system linkage and IT development. Industrial Bank of Korea (IBK) will accept applications for the revamped Bridge Loan starting today.