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.
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.