Kim Eun-kyung, head of the Korea INclusive Finance Agency (KINFA), said on the 13th that "there is a high risk that soldiers will become so-called credit delinquents after using game money and the like on their phones at night."
Kim said this at an afternoon briefing on the work of financial public institutions under the Financial Services Commission held at Government Complex Seoul, noting, "There is a need to expand education so that soldiers do not become credit delinquents due to a lack of financial knowledge," and stated accordingly.
Kim said, "As soldiers' monthly pay has increased, more of them are saving, but on the other hand, not a few cases show poor money management because they suddenly have relatively large sums," adding, "We will expand measures to visit the Army, Navy, Air Force, and Marine Corps training commands to conduct financial education directly." Kim continued, "Due to insufficient consulting and financial education and the digital divide, consumer protection remains provider-centered," and said, "If interest rate cuts and payback methods are felt, a bridge role becomes possible." The Korea INclusive Finance Agency (KINFA) plans to launch a youth future savings product, carry out a full overhaul of Smile Microcredit, and introduce a credit build-up (Creditbuild-up) system that links to bank-sector unsecured loans.
Regarding some criticism that the "liquidation-type debt adjustment" causes moral hazard, Kim explained, "It is a system to give another chance to those for whom recovery is truly difficult, such as basic livelihood beneficiaries or people with severe disabilities." Liquidation-type debt adjustment is a system under which socially vulnerable people can have up to 90% of principal reduced, and if they faithfully repay more than half of the adjusted debt for more than three years, the remaining debt is eliminated. The government will expand the principal eligibility threshold for liquidation-type debt adjustment from 15 million won or less to 50 million won or less. Kim said, "Since going all the way to court takes a lot of expense and time, the Credit Counseling & Recovery Service (CCRS) reduces personal bankruptcy expenses upfront and gives debtors in vulnerable groups, such as basic livelihood beneficiaries and people with severe disabilities, a chance to recover."
Lee Eog-weon, chair of the Financial Services Commission (FSC), said, "The liquidation-type debt system allows people in difficulty to adjust their debt and, if they faithfully repay half over three years, the remaining half is written off," adding, "I think this is a different issue from moral hazard."