As the government decided to somewhat ease the cap on household loans in the banking sector, mutual finance institutions are also expecting additional quota allocations.
According to the financial authorities on the 20th, the Financial Supervisory Service is planning a working-level meeting soon with loan officers at mutual finance institutions. The Financial Supervisory Service discussed with officials from 14 banks on the afternoon of the previous day ways to adjust the target growth rate for the total amount of household loans. Additional limits by bank are expected to be decided this week.
Mutual finance institutions conveyed attendee-by-attendee suggestions and requests at the expanded household liability review meeting held last week and offered views on increasing the total amount, but internally they are not placing high expectations. This is because many institutions exceeded their allocated total for household loans in the first half of the year. An official at a mutual finance institution said, "Even if the target limit is doubled, we have already nearly filled it."
If the Financial Services Commission excludes group loans when tallying household loans, mutual finance institutions will also gain lending capacity. At mutual finance institutions, about 70% of the increase in household loans is group loans. However, authorities are reportedly leaning toward granting additional limits rather than completely excluding group loans.
If additional limits are allocated, institutions such as the Korean Federation of Community Credit Cooperatives (KFCC), NongHyup, and credit unions, which had no net increase this year, are expected to be able to extend at least a small amount of new loans. Currently, the KFCC and credit unions have a "no net increase" rule on household loans, while NongHyup is allowed to increase by only up to 1% from last year.