KB Kookmin Bank said on the 10th it will introduce an inclusive finance program that uses the portion of interest on sole proprietors' loans exceeding an annual 5% to repay principal, easing debt burdens.
The program will be piloted this month as part of KB Financial Group's "KB Kookmin Happiness Hope Project." When a sole proprietor extends an existing business loan and the rate exceeds an annual 5%, the amount of interest corresponding to the excess (up to 4 percentage points) will be automatically applied to principal repayment.
When principal is repaid with the excess interest paid, the prepayment fee will also be waived. As the outstanding loan balance decreases, the subsequent loan interest burden will also decline, which is expected to help ease sole proprietors' finance expense.
Eligible customers are sole proprietors with low credit ratings who hold won-denominated loans with a lending rate exceeding an annual 5%.
A KB Kookmin Bank official said, "This program is expected to benefit more than about 10,000 sole proprietors."