Legislative talks on the National Basic Finance Guarantee Act, which would define financial access for vulnerable groups, including low-credit borrowers, as a fundamental right the state must guarantee, are gaining traction under the leadership of the Democratic Party of Korea. The aim is to view finance as a right of the people and guarantee it institutionally. As ways to secure basic rights, proposals include debt adjustment to ease the burden on long-term arrears holders and the creation of low-credit loan products.
On the morning of the 10th, Democratic Party of Korea lawmaker Min Byeong-deok, the Basic Society Committee, and the National Research Council for Economics, Humanities and Social Sciences held the third policy forum for realizing the people's basic financial rights at the National Assembly. Attending the forum were Min; lawmaker Kim Nam-hui; former National Planning Advisory Committee chair Lee Han-joo; and Korea INclusive Finance Agency (KINFA) President Kim Eun-kyung.
In opening remarks, Min said, "Even at this moment, low-income, low-credit borrowers pushed out of the formal financial system are left without even basic financial services," and added, "There are long-term arrears claims totaling 50 trillion to 60 trillion won based on principal, so should these claims serve as a shackle that debtors who have already lost repayment capacity can never escape for life?"
Min added, "We can no longer dismiss as merely personal misfortune the tragedy of an entire family collapsing under the shackle of debt," and said, "The National Basic Finance Guarantee Act is a law to approach financial issues as matters of rights, not charity."
Presenting on the topic "Analysis of the socioeconomic effects of realizing basic financial rights," Hansung University professor Kim Sang-bong proposed measures such as basic counseling, basic debt adjustment, basic loans, basic insurance, and basic savings. Basic counseling would provide financial information and counseling, and basic debt adjustment would support a fresh start through debt adjustment. Basic loans would guarantee financial access for low-credit borrowers, and basic insurance would support enrollment in microinsurance. Basic savings would help vulnerable groups build assets through tax exemptions and government matching.
Kim also analyzed, "Assuming the final acceptance amount for basic financial rights is 5.11674 trillion won based on the Supreme Court's personal bankruptcy amounts and personal rehabilitation amounts and the Credit Counseling & Recovery Service (CCRS)'s debt adjustment amounts, the total economic ripple effect would be 12.71095 trillion won, with an employment inducement effect of 249,876 people and a job creation effect of 281,693 people, contributing to gross domestic product growth and job creation."