The Financial Services Commission and the Korea INclusive Finance Agency (KINFA) said on the 30th that, starting on the 31st, three microfinance loan products — the Youth Future Link Loan, the Youth Microfinance Working Capital Loan, and the Financially Vulnerable Livelihood Loan — will be launched through 163 Microfinance branches nationwide (corporations, bank foundations, and regional corporations).
The Financial Services Commission (FSC) said the purpose is "to supply low-interest funds more quickly to young people who have difficulty using formal finance due to a lack of financial history and to financially vulnerable groups who find it hard to cross the thresholds of finance."
The Youth Future Link Loan offers up to 5 million won at an annual interest rate of 4.5% with a maximum term of six years (five-year grace period, six-year repayment). The financial authorities explained that screening will focus on the intended use of funds (employment, obtaining certifications, startup, initial settlement funds) and the willingness to repay for unemployed or early-career young people who are in the bottom 20% of credit scores or in the near-poor or below.
The loan limit for the Youth Microfinance Working Capital Loan, available to self-employed people age 34 or younger, will be expanded from the current 20 million won to 30 million won. Eligibility is self-employed people who are in the bottom 20% of credit scores or in the near-poor or below. The interest rate is 4.5% annually, with a six-month grace period and five-year repayment.
The newly launched Financially Vulnerable Livelihood Loan offers up to 5 million won at an annual interest rate of 4.5% with a maximum term of six years (one-year grace period, five-year repayment). Eligible borrowers are those in the near-poor or below, or those simultaneously meeting all of the following: in the bottom 50% of credit scores, annual income of 35 million won or less, and either fully repaid an illegal private finance prevention loan or have faithfully repaid Microfinance loans for at least one year, as well as victims of jeonse fraud and residents of special disaster areas.
The Financial Services Commission (FSC) plans to add the "expanded interest support project for young self-employed living outside metropolitan areas" in the second quarter of this year after consultations with local governments. Those eligible for support are self-employed young Microfinance users age 34 or younger who live in local governments participating in the interest support program.