Chairperson Lee Eog-weon of the Financial Services Commission (FSC) gave a report on "inclusive finance performance" at a Cabinet meeting on the 6th and received public praise from President Lee Jae-myung, who said, "You are doing very well."
On this morning, at the 20th Cabinet meeting combined with the 7th Emergency Economic Review Meeting held at the Blue House, the Chairperson conducted a work briefing under the theme "an inclusive finance grand shift that saves people." The Chairperson announced the status of inclusive finance efforts carried out so far in three directions: ▲ improving financial accessibility ▲ managing arrears claims ▲ resolving illegal private lending issues.
The Chairperson said, "The grand shift to inclusive finance is just beginning. The road is long, but it is a road we must take," adding, "To redesign the financial system itself into inclusive finance, we will discuss widely with civic groups, social activists, and research institutes and seek innovative solutions that are not bound by existing thinking."
When the Chairperson's report ended, President Lee responded, "The Financial Services Commission (FSC) is producing tremendous results. Thank you for doing very well." As the Chairperson presented results on the write-off of long-term arrears claims, the president also praised, saying, "You are doing an excellent job."
President Lee said, "Right now, lending practices are very narrowly focused on highly creditworthy borrowers with strong capacity, and the Financial Services Commission (FSC) is working to broaden this to mid- to low-credit borrowers," and asked, "When evaluating financial institutions, is there a way to assess how much inclusive finance for mid- to low-credit borrowers they have achieved and provide disadvantages or advantages accordingly? Is there a way to mandate this institutionally?"
The Chairperson said, "There are three pillars: obligations, incentives, and evaluations," adding, "Banks are required to allocate 15% of their operating profit to Sae-Hope Seed as a mandate. For mid-rate loans, we provide incentives such as grants." The Chairperson then answered, "In addition, we are comprehensively preparing an evaluation system for inclusive finance."
Regarding financial companies' practices for managing arrears claims, President Lee said, "Until now, it has been taken for granted to squeeze out even 1 won from the very last person with ruthless persistence, but it should not be this way," adding, "If debt adjustment is done early, when three months' interest is unpaid, don't they sell after taking 10% of the principal? Reducing principal, lowering interest, and making adjustments would also help improve financial firms' soundness, wouldn't it?"
Lee then asked, "If about five people are likely to fall into arrears, is it possible to hear each person's circumstances and cut the principal by 30% to 50%, and even reduce arrears interest?"
The Chairperson said, "In the United Kingdom, doing this raises the likelihood of long-term recovery, and it is encouraged," adding, "We are telling financial companies to meet and attempt debt adjustment quickly, to do it proactively, and not to wait until it all goes into arrears but to go early and talk. Financial institutions are changing a lot."
President Lee said, "When I listen to Financial Services Commission (FSC) staff, there will be times when they think, 'Am I wrong?' You must not let that pass." This was interpreted as a remark aimed at some public officials who voice opposition to government policies such as inclusive finance.
Chairperson Lee Eog-weon said, "Financial Services Commission (FSC) employees are changing as well," and President Lee said, "Organizations that handle money stand on the very front line between the devil and justice. There is a high chance they will be swayed without realizing it."