Inclusive finance policies are aimed at providing financial support to the most vulnerable and marginalized groups to help them gain new opportunities and get back on their feet, thereby creating a virtuous cycle between financial inclusion and economic growth. A variety of government-sponsored microloan products are available for low-income individuals and those with unfavorable credit records. In addition, debt adjustment programs are available for delinquent debtors, offering an extended payment period, amortization, interest rate reduction and debt reduction. Consumer protection is a key area of inclusive finance policies. In this regard, the new legislation on financial consumer protection passed at the National Assembly in March 2020 aims to protect consumers from misselling and other unfair sales practices of financial companies while strengthening consumer rights and empowering consumers to make informed decisions about their investment and asset management.
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Apr 15, 2010
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Sep 17, 2009
- Expanded Microcredit for Low-Income Households
- Following the 31st Emergency Economic Meeting, the government revealed its “Miso Credit Foundation” (previously named the Microfinance Foundation) plan to provide extensive support in microcredit loans to low-income households, which will be enforced in December.The Foundation is expected to provide KRW 2 trillion over the next 10 years, in excess of 13 times the previous amount over the last 10 years, made possible through contributions from the private sector exercising their corporate social responsibility.The Miso Credit Foundation plans to open 20 to 30 branches at the first stage and expand up to 300 nationwide branches to carry out operation in order to maximize accessibility. The branches will be independently incorporated and operated, receiving operational guidelines, consulting and education from the main office.The branches will be staffed mostly by volunteers, including the branch managers, which will be non-paid positions given to ex-financiers and retirees. The regular employees will be paid less than KRW 1 million a month, and student volunteers will be paid a minimum for their daily allowances. The funding support structure for the branches will be flexible and determined according to the regular examination of their performances.In terms of funding the Foundation, the member corporations of the Federation of Korean Industries have committed to donating up to KRW 1 trillion over the next 10 years. The other KRW 1 trillion will be contributed by financial institutions, including the KRW 700 billion withdrawn from dormant accounts currently managed by the Microfinance Foundation, KRW 200 billion initially and KRW 50 billion annually over the next 10 years.The target beneficiaries will include petty business owners, traditional market business owners, viable startup franchise store owners, regular startup businesses, startup partnership businesses, and verified non-profit organizations.The interest rates will be set below the prime rate, currently
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Apr 08, 2009
- Pre-Workout Program
- The Credit Counseling and Recovery Service (CCRS) is a nonprofit corporation aiming to support debtors in financial difficulties and regulated by the Financial Services Commission.Starting on April 13 for a limited duration of one year, the CCRS and creditor institutions will run a “Pre-Workout Program” in support of individual borrowers who are delinquent for a short term between one and three months. This plan was first announced in March 10 this year.The main objective of this initiative is to take preemptive steps against further increase in as well as protraction of household delinquents, posing a threat to hurt asset soundness of creditor financial institutions.To be qualified for the program, there are six criteria which applicants must satisfy, and they include the total debt amount limit by two creditors (under KRW 500 million), delinquency length (between 30 and 90 days), and the ratio of new credit to total existing debts (30% maximum), among others.Meanwhile, to prevent credit delinquents from taking advantage of this program by intentionally putting off repayments, the CCRS and financial institutions will soon unveil additional provisions.For further details, interested users can call (1600-5500) or email CCRC (www.ccrs.or.kr) directly.* Please refer to the attached PDF for details.
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Feb 18, 2009
