FSC Announces Plans to Improve and Diversify Microfinance ServicesMar 30, 2021

The FSC announced plans to expand and diversify microfinance opportunities for individuals with low credit backgrounds on March 30 as a follow-up to the announcement on the revised maximum legal lending rate that is scheduled to go into effect from July 7.


Key Details


I. Expanding Microfinance Opportunities

-  Temporarily provide KRW300 billion in alternative lending options for those who currently use loans with interest rates above the twenty percent threshold

-  Provide a two percent reduction in interest rates for Sunshine Loan 17 and expand incentives for those paying back diligently

-  Increase the availability of Sunshine Loan Youth by KRW100 billion and temporarily provide KRW5 million in lump-sum payment to new users

-  Improve the employment-based microloan product for individuals with low credit standing and low income


II. Introducing New Microfinance Opportunities

-  Expand the contribution base (which is currently limited to mutual finance and savings banks only) and establish a steady fundraising structure for microfinance services by opening up the scope of contributors to all financial sectors including banks, insurers, credit finance firms, etc.

-  Launch a new banking sector-based microloan product (“Sunshine Loan Bank”) which will help build a bridge to the mainstream finance sector through credit score improvements, etc.

-  Launch a new credit finance sector-based microloan product (“Sunshine Loan Card”) which will help improve convenience for those with low credit standing


III. Improving Effectiveness of Microfinance

-  Strengthen connection between microfinance and welfare, employment and debt adjustment programs

-  Strengthen connection between microfinance and financial education, credit & debt management consulting, etc.

Strengthen connection between microfinance and the automatic dormant account inquiry system, etc.

* Please refer to the attached PDF for details.