The financial authorities are pushing inclusive finance as a structural reform task for the entire financial system, not merely a policy to support low-income people. The goal is to go beyond a simple support policy and redesign a financial framework based on inclusive finance.
The Financial Services Commission held an "inclusive finance on-site forum" on June 17 at the Korea Deposit Insurance Corporation (KDIC) in Jung-gu, Seoul, chaired by Chairperson Lee Eog-weon, and discussed the policy direction for inclusive finance. Lee said, "Inclusive finance is not a one-off livelihood measure, but a structural reform task for the financial system."
Lee added, "We need to look into why people turn back at the threshold of formal finance, and why a single arrears turns into long-term arrears, examining the structure itself," and emphasized, "It is important to build a pathway for taking a leap by building credit through policy finance for low-income people and consolidation into formal finance."
Im Su-gang, former vice chair of the Production and Inclusive Finance Research Association, who attended the forum, argued that the public interest and commercial nature of finance should be balanced. Im defined financial exclusion as a phenomenon revealing the weakening of the public role of financial institutions, and assessed that young people, low-income earners, and the temporarily unemployed are being excluded from the financial market by quantitative criteria.
Kang Kyung-hoon, a professor at Dongguk University, defined inclusive finance as a policy to correct structural market failures rather than a welfare policy. Kang pointed out that as domestic finance has been operated around real estate collateral loans and high-credit borrowers, innovative corporations and low-income groups are being marginalized in access to finance. Kang explained that expanding financial access can increase opportunities for education and startups and can have a positive impact on economic productivity and growth.
Ko Seok-heon, a vice president at Shinhan Financial Group, premised that financial companies must perform growth and social roles simultaneously, and said that managing arrears rates is a key task to expand inclusive finance. Ko noted that the burden on soundness is heavy, such as rising arrears rates on mid- to low-credit loans, and proposed creating a virtuous cycle that converts non-prime customers into prime customers by combining three pillars: quantitative expansion of inclusive finance, easing interest burdens, and strengthening alternative credit assessment.
Officials from the Financial Supervisory Service, the Korea INclusive Finance Agency (KINFA), the Korea Credit Information Services, and the Korea Asset Management Corporation (KAMCO), as well as academics and on-site experts, attended the event. The Financial Services Commission (FSC) conducted the forum in a town hall format that directly gathered opinions from on-site experts, such as civic group activists and attorneys specializing in personal rehabilitation, breaking away from traditional discussions centered on formal financial institutions.