Plans to establish the Inclusive Finance Safety Fund next year have effectively fallen through. However, the extension of inclusive finance contributions passed a National Assembly standing committee, avoiding a funding gap crisis.
The financial authorities said on the 6th that a bill to extend by 10 years financial companies' obligation to pay contributions to the Korea INclusive Finance Agency (KINFA) passed the National Policy Committee's full session on the 3rd.
Under the current Inclusive Finance Act, financial companies are required to make certain contributions to the Korea INclusive Finance Agency (KINFA). The amendment to the Inclusive Finance Act is expected to be handled at the latest at the start of next month in a plenary session.
However, the ruling and opposition parties remain far apart over the bill to establish the Inclusive Finance Safety Fund.
The ruling party says it aims to resolve the issues of a temporary funding structure and budget rigidity by creating a basis for constant contributions from the financial sector and government loss compensation. The opposition party, however, has taken a cautious stance on codifying the fund, saying that support for low-income people is sufficiently possible under the current system.
An official at the financial authorities said, "Even if it doesn't happen next year, we can prepare now and do it the year after," adding, "Not being fund-based does not mean the supply of (inclusive finance) products will stop, so we will calmly prepare operations and management in anticipation of establishing the fund."