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.
Jul 06, 2022
- Interest Rate Disclosure System to be Improved for Protection of Consumer Rights and Interests
- The FSC unveiled a set of measures to make improvements to the interest rate disclosure system in the banking sector on July 6. The measures are aimed at protecting the rights and interests of financial consumers and include the following. a) Making improvements to the disclosure of net interest spread (NIS) comparisons and on the disclosure of lending and deposit rates to make accurate and adequate information about interest rates available to consumers. b) Overhauling the rate calculation system to ensure that rate calculation is conducted in a reasonable and transparent way and bolstering the banking sectors self-inspection and internal control on rate calculation. c) Piloting online deposit products intermediary business, strengthening the requirement to explain personal credit assessment to consumers and having banks to disclose their performance on meeting consumers demand for interest rate reduction in order to promote interest rate competition between banks. Background With the normalization in monetary policy taking place across the globe and the Bank of Koreas base rate increase, rapidly rising market rates have pushed up lending rates and deposit rates in the banking sector. In particular, due to a considerable hike in lending rates to households, banks net interest spread (NIS) for the household sector has expandedand consumers are experiencing added burdens as a result. As there are possibilities of growing financial cost burdens on consumers in times of rate hikes, the authorities plan to seek following measures for improvement to expand interest rate disclosures and ensure rate calculation in a reasonable way. Key Details for Improvement I. Improving Interest Rate Disclosures to Bolster Information Accessibility for Financial Consumers a) Net interest spreads (NIS) of all banks will be disclosed in a comparative format (on the website of Korea Federation of Banks) and the disclosure cycle will be shortened from three months currently to one month. Sin
Jun 02, 2022
- Debtor Assistance with Legal Representation and Litigation Services Available at Free of Charge
- The FSC unveiled an overview of the current status on the use of debtor assistance with legal representation program on June 1. In 2021, a total of 1,200 victims of illegal private lending or debt collection activities applied for support in 5,611 cases and debtor assistance with legal representation was provided in 4,841 cases in total, which signifies that the debtor assistance program has become a crucial social safety net for damages inflicted by illegal private lending. The authorities plan to continue to make efforts to prepare for a rise in demand for remedies from illegal private lending by strengthening ties with various types of inclusive finance measures and securing sufficient fiscal resources, while working to stamp out illegal private lending by closely cooperating with investigative authorities. Overview Since January 28, 2020, the government has been offering the debtor assistance with legal representation programat free of charge to help victims of illegal debt collection activities done by both registered and unregistered money lenders and to support those that have fallen prey to exorbitant interest charges in excess of the maximum legal lending rate. When a victim of illegal private lending applies to seek support through the Financial Supervisory Service (FSS)s website or via a phone callplaced to the illegal private lending help center or the Korea Legal Aid Corporation (KLAC), attorneys from KLAC provide assistance with legal representation in dealing with illegal private lenders and for litigation services at no cost to debtors. (Legal Representation for Handling Debt Collection Issues) KLAC attorneys provide service of handling debt collection issues with creditors (money lenders) in place of debtors in order to help debtors avoid any harm caused by illegal debt collection activities. (Litigation Services) For damages incurred by exorbitant interest charges in excess of the maximum legal lending rate and illegal debt collection activities, K
Mar 21, 2022
- 2022 Global Money Week Held on March 21-27
- The FSC announced that this years Global Money Week (GMW)will be held online from March 21 to 27 with aims to raise awareness on financial education. The GMW will feature a seminar on promoting financial education and offer both specific needs-based and participatory learning programs tailored to the needs of different age groups. * The Global Money Week is a financial education campaign launched by the OECD since 2012 and is held by member countries on a voluntary basis during the fourth week of March every year. Under the theme of Build your future, be smart about money, this years GMW will kick off with a seminar looking at the current situation with financial education and discussions on strengthening financial consumer protection and promoting financial education at schools. Moreover, both tailored and participatory learning programs will be available for different age groups from children to teenagers to workers to seniors to enable easy access to financial education for diverse types of consumers and allow them to gain proper knowledge and attitude on finance. During the opening session, FSC Vice Chairman Doh Kyu-sang delivered congratulatory remarks as summarized below. Vice Chairmans Remarks (Importance of Financial Education) The official theme of this years Global Money Week is Build your future, be smart about money. From gaining an understanding about the concept of money during our childhood to managing our assets and pension for retirement, finance is closely knitted to our daily lives throughout our lifetime. The changes taking place in finance and social structure also highlight the significance of financial education. As financial instruments are structured in more complicated ways and increasing life expectancy necessitates individuals to prepare for life after retirement, financial education should be available to help individuals to boost their financial capacity and prepare for future. (Financial Education Policy) In the aftermath of the global
Feb 24, 2022
- Authorities Introduce Guidelines for Developing Senior Friendly Mobile Bank Applications
- The FSC and the FSS along with the banking industry introduced a set of guidelines that will help make mobile bank applications more senior friendly amid a rapid transition to digital finance and a rise in the number of the elderly using mobile bank applications.The guidelines contain thirteen key principles categorized into three issue areas as shown below. I. Senior user mode accessibility a) Provide a senior user mode to increase usability by the elderly b) Minimize steps for arriving at the senior user mode c) Allow users to freely choose the senior user mode d) Minimize altering key functions and keep consistency and continuity II. User convenience a) Make the structure and design consistent to boost user convenience b) Provide easy-to-understand contents c) Provide key functions that are most frequently used by the elderly d) Allow elderly users to easily understand the progress of their services e) Provide sufficient time and explanation to elderly users at each stage f) Refrain from providing too much information at once III. Other issues a) Provide learning contents to facilitate use by the elderly b) Set up safeguards to prevent financial frauds targeting elderly users c) Make continuous efforts to bring about improvements to the senior user mode Expectation Schedule As the guidelines have been prepared after a sufficient review and discussions within the banking industry, it is expected that practical improvements will be made to the mobile bank applications. Following the guidelines, banks are expected to introduce updated versions of their mobile applications by the first half of 2023. The authorities plan to introduce the same level of guidelines in other financial sectors after taking feedback from banks. The guidelines will also be provided to financial education providers to be used as educational material for the elderly digital finance users. * Please refer to the attached PDF for details.
Feb 07, 2022
- New Installment Savings Plan for Young Adults to be Available from February 21
- The FSC announced the availability of new installment savings plan for young adults which will be available at local banks from February 21 with incentives of tax exemption on interest income and savings subsidy of up to KRW360,000. The new savings scheme for young adults is intended to help encourage young adults to accumulate financial assets by offering them benefits. Young adults in the age of 19 to 34 years old at the time of applying and whose annual income for 2021 or 2020stood at or below KRW36 million can sign up for the new installment savings plan. The two-year term savings plan has a monthly installment limit of KRW500,000 and offers tax exemption on interest income and savings subsidy of up to KRW360,000upon maturity. Between February 9 and 18, prospective applicants may check their eligibility via mobile applications of local banks. From February 21, those who have previewed their eligibility status through a mobile application can sign up for the installment savings plan using a streamlined mobile signup process. * Please refer to the attached PDF for details.
Dec 29, 2021
- FSC to Bolster Inclusive Finance Measures and Promote Stronger Support for Credit Recovery
- FSC Chairman Koh Seungbeom attended a memorandum of understanding signing event between major credit guarantee institutions on December 29 and delivered a speech emphasizing the importance of providing stronger credit recovery support for small merchants and other vulnerable debtors. The Credit Counseling Recovery Service (CCRS) and five other relevant institutions including Korea Credit Guarantee and Korea Housing Finance Corporation signed an MOU pledging to improve standards for debt adjustment and strengthen support for credit recovery on guaranteed loans. The following is a summary of Chairman Kohs remarks. Chairmans Remarks (Inclusive Finance Measures) The Korean economy has made a quick recovery amid the pandemic even though there are still uncertainties related to the spread of the new variant and asset price volatility. As the economic fallout of the pandemic weighs heavily on the financially vulnerable groups, the need for inclusive finance measures has become ever more important. For individuals with mid-to-low credit backgrounds, the credit market conditions have not deteriorated extensively. However, rising interest rates and the ongoing pandemic raise concerns about the possibility of a narrower access to finance for vulnerable groups. As such, the authorities plan to implement an array of inclusive finance measures to ensure that access to finance is available for vulnerable groups. First, the government will make available up to KRW10 trillion in microloan products for different groups. Second, the government will ensure that lending to lower income earners and other vulnerable individuals will not be impaired by the governments household debt management measures. Third, the authorities will work to provide low interest rate business relief loans to small merchants and self-employed business owners that have seen their earnings decline due to strict social distancing measures amid the pandemic. Along this line, the authorities will also work to root
Dec 21, 2021
- Authorities to Strengthen Financial Education Programs for Digital Era
- The FSC held this years second financial education council meeting chaired by Vice Chairman Doh Kyu-sang on December 21 and discussed ways to improve financial education programs for a digital era. The measures for strengthening the financial education programs for 2022 are aimed at addressing the problem of a digital divide and boosting financial consumers capabilities for and awareness in using financial services via digital channels. The measures are also aimed at providing targeted supports for different age-specific groups for a complete guide on ones life cycle of using financial services. To this end, the authorities will work to diversify the ways in which financial education programs are delivered, for instance, through the metaverse and other digital contents and interactive channels. The authorities will also work to strengthen financial education programs in school curriculum while bolstering the councils organizational capacity by promoting more participation from private sector experts and improving networks with local financial educators in different regions. The authorities will work to ensure effective implementation of specific measures in close coordination with the other relevant ministries and institutions. * Please refer to the attached PDF for details.
Dec 07, 2021
- Support for Vulnerable Debtors Available for Six More Months until June 2022
- The FSC along with all financial sectors and relevant institutions agreed to extend the period of support available for vulnerable debtors who have been hit by the COVID-19 for six more months until June 30, 2022. These support measures for individual (non-corporate) debtors were first introduced on April 29, 2020 to help vulnerable debtors whose income levels fell due to the COVID-19 pandemic. The period of their availability has been extended twice thereafter to continue to provide support until the end of this year. As unemployment and job losses continue to weigh down these debtors amid a protracted pandemic situation, the authorities decided to extend the period of these supports for six more months until June 30, 2022. As such, pre-workout programs offered by individual lending institutions and the individual debt purchase program administered by the Korea Asset Management Corporation (KAMCO) will be available for six more months. Individual debt adjustment programs offered by the Credit Counseling Recovery Service (CCRS) is available on a regular basis. The FSC will work to provide a sufficient level of assistance to vulnerable sectors while preparing for an orderly exit from the pandemic-era policy. * Please refer to the attached PDF for details.
Nov 22, 2021
- Joint Debt Adjustment Program to Help Young Adults Struggling with Multiple Debts
- The FSC and the Ministry of Education signed an agreement with the Korea Student Aid Foundation (KOSAF) and the Credit Counseling and Recovery Service (CCRS) on November 22 to set up a joint debt adjustment program and help relieve debt burdens of young adults who are struggling with multiple debts. The agreement introduces a joint debt adjustment program which will help young adults struggling with multiple debts (including student loans) by allowing debt cancellation of up to 30 percent off the principal and installment payment of maximum 20 years. As a part of the agreement, the KOSAF newly joined the CCRSs pact for credit recovery support to make student loans eligible for debt adjustment program managed by the CCRS. Thus, the joint debt adjustment program provided by the CCRS will handle both student loans and other types of loans of vulnerable young debtors. From 2022, the authorities expect that some 20,000 young adults who are struggling to pay off student loans will benefit from this program every year.The joint debt adjustment program will provide meaningful assistance to young adults facing the burden of multiple debts. * Please refer to the attached PDF for details.
Oct 26, 2021
- New Credit Finance Microloan Product to Help Expand Microfinance Opportunities
- The FSC announced that a new credit finance sector-based microloan product (Sunshine Loan Card) will be launched on October 27 as part of the authorities plan for improving and making microfinance services more diverse. Individuals who have completed the required educational program on personal credit management, have annual disposable income of at least KRW6 million, are in the bottom 10 percentile group in terms of personal credit ratings and have no credit cards of their own at the time of applying for a guarantee at the Korea Inclusive Finance Agency (KINFA) are eligible to apply for a Sunshine Loan Card with the maximum support of KRW2 million. After receiving an approval for credit guarantee from the KINFA, applicants may choose one of the seven credit card companies that have partnerships with the microfinance program for their credit card issuance. The authorities expect that the new credit card-based microloan service will help increase convenience and expand opportunities for lower income earners and those with low credit standings who have been denied access to traditional credit finance channels before. * Please refer to the attached PDF for details.
Oct 14, 2021
- Financial Development Review Committee Holds 2nd Special Committee Meeting on Young Adults
- The FSC held the financial development review committees 2nd special committee meeting on young adults on October 14, discussing the need to have financial policies tailored to the needs of young adults. At the beginning of the meeting, FSC Chairman Koh Seungbeom spoke about the newly created Youth Policy Division within the FSC, which is charged with developing youth-specific financial policy measures. Chairman Koh touched upon the negative effects of digital transformation in the society as well as diminishing employment and educational opportunities and a widening income and wealth gap that occurred during the process of responding to the COVID-19 pandemic, especially on young adults. As such, Chairman Koh said that the FSC will work to provide targeted support for young adults through preferential savings, investment schemes and so on in order to help young adults build potential for their future. More specifically, Chairman Koh pledged that the financial authorities will support young adults by (a) working to develop diverse financial products intended to help them accumulate financial assets, (b) promoting job creation and employment opportunities in financial sectors and (c) maintaining close communication and encouraging active participation from young adults. The authorities plan to take into account comments from diverse participants in todays meeting when developing youth-specific financial policy measures in the future while continuing with discussions on important issues. * Please refer to the attached PDF for details.
Sep 14, 2021
- FSC Chairman Discusses Important role of Microfinance Policy
- FSC Chairman Koh Seungbeom visited the Korea Inclusive Finance Support Center on September 14 and held a meeting with small merchants and self-employed business owners on the governments microfinance programs. Chairmans Remarks Microfinance policies are aimed at providing both financing and welfare opportunities. On the one hand, there is an obligation to make available adequate levels of low interest rate loans and debt adjustment opportunities to those that need them. On the other hand, there exist concerns over the possibility of loan defaults and the issue of moral hazard. Microfinance opportunities need to be provided in a flexible manner against the backdrop of a financial environment with these conflicting issues. With the lowering of the maximum legal lending and enhanced household debt management measures, lower income individuals with low credit backgrounds may face difficulties in accessing financing opportunities. With lower income individuals and other vulnerable groups continuing to face economic hardships due to COVID-19, it is important to make sufficient support available to them. To this end, the authorities have increased the amount of support available for microfinance from KRW7.9 trillion to KRW9.6 trillion.In this regard, a number of new microloan products were launched in this year to help prevent lower income earners and low credit holders from falling into a lending cliff. For individuals that have been hit by the COVID-19 and for young adults, the authorities will work to come up with more targeted support measures. For self-employed business owners facing the risk of business closure due to COVID-19, loan maturity extensions and payment deferrals as well as ultra-low rate loans have been made available. The authorities will look into ways to improve the debt adjustment programs to help those unable to pay off debt get back on their feet. The authorities will also work to introduce a new installment savings program with interest rate benefi
Aug 04, 2021
- Provision of Microfinance Support to be Expanded to KRW9.6 Trillion in 2021
- The FSC announced that the total amount of state-backed microfinance supports made available to lower income earners and low credit holders reached more than KRW4.68 trillion in the first half of 2021. Compared with the same period of last year, 22,252 more individuals applied for assistance (up 5.7%), and the total amount of microfinance supports provided rose KRW467.7 billion (up 11%). To continue to make microfinance options available for those struggling through the pandemic and help improve access for lower income earners and low credit holders, the FSC will expand the availability of microfinance supports to KRW9.6 trillion this year. Among existing programs, the microloan programs for low income workers and young adults will be expanded by KRW1 trillion and KRW100 billion, respectively. With the maximum legal lending rate lowered from 24 percent to 20 percent beginning on July 7 this year, KRW300 billion in additional microfinance support is newly made available for those who have been on high interest rate loans (above 20% per annum) before and wishing to make a switch to lower interest rate ones. In addition, banks have begun to offer microloan products in the amount of about KRW300 billion since July 26, and credit card companies are also expected to launch microfinance services totaling some KRW50 billion in October this year. * Please refer to the attached PDF for details.
Jul 06, 2021
- Maximum Legal Lending Rate Lowered to 20%
- The FSC announced that a four percentage point reduction in the maximum legal lending rate from 24 percent to 20 percent will go into effect on July 7. Charging an interest rate in excess of the maximum 20 percent is illegal for new and renewal loan contracts from July 7, 2021. Financial institutions and lenders that violate this rule can face penalties of up to three years of imprisonment or maximum KRW30 million in fines. For borrowers who face difficulties in renewing their existing loan contracts or applying for new loans, various microloan opportunities are available through the Korea Inclusive Finance Agency (KINFA), including a new microloan service provided by banks that allows borrowers with low income and low credit scores who have been on other types of microloan services to make a switch to the new service. The government will operate an enhanced monitoring period between July and October to root out illegal predatory lending practices. The government also provides support for legal representation for those that are seeking to reclaim interest payments in excess of the maximum lending rate. Tailored consulting support and referral service is also available from KINFA. * Please refer to the attached PDF for details.
Jul 01, 2021
- FSC Chairman Speaks on the Significance of New Microloan Service Provided by Banks
- FSC Chairman Eun Sung-soo attended the MOU signing ceremony between the Korea Inclusive Finance Agency, Korea Federation of Banks and thirteen banks on July 1 for the launching of a new microloan service offered through banks. As banks will begin to make contributions to the pool of microfinance funds starting from October 9 this year pursuant to the revised Microfinance Support Act,the Korea Inclusive Finance Agency and thirteen participating banks signed an MOU establishing a cooperative working relationship between them with regard to the launching of a new microloan service available through participating banks. The new microloan service provided by banks is aimed at providing microfinance opportunities of up to KRW20 million to individuals with low income and low credit scoreswho have been using other types of microloan services for more than a year and have demonstrated improvements in terms of the level of debt or credit score. It will be available at the Industrial Bank of Korea, NH Bank, Jeonbuk Bank and BNK Kyongnam Bank from July 26 with other banks scheduled to launch within this year. At the MOU signing ceremony, FSC Chairman Eun Sung-soo spoke about the significance of the new microloan service becoming available in the banking sector and stressed the need to effectively manage household debt. (Microloan Service Provided by Banks) The government has been working to reduce burdens and improve access to financing opportunities for lower income households. As part of this effort, the newly launched microloan product will provide individuals with low income and low credit scores an opportunity to access banks for microloan services. With its launch at the end of July, the new microloan product offered through banks has a target of providing a total of about KRW300 billion by the end of this year. As such, banks and the Korea Inclusive Financial Agency should work to ensure effective implementation. (Household Debt Management) The growth in household debt a
Jun 21, 2021
- 40-year Mortgage Loan and Financing Support for Non-homeowners to be Available from July 1
- As a follow-up to the earlier announcementson boosting financing support for non-homeowners, especially among young adults and newly married couples, the FSC announced that 40-year home mortgage loans and greater loan support for renters will be available from July 1, 2021. (40-year Home Mortgage) 40-year mortgage loans will be newly available as part of the government-sponsored home mortgage loan programs that provide mortgage loans to lower income households at low and fixed interest rates. Young adults aged up to 39 years old and newly married couples (married for up to 7 years) are eligible to apply for 40-year home mortgage loans, which provide benefits of fixed interest rates over the entire lending period and no prepayment penalties after three years. The maximum lending amount for income qualified mortgage loans (including 40-year mortgage loans) will be increased from KRW300 million to KRW360 million beginning on July 1. (Financing support for Renters) The maximum loan amount for young adults (aged up to 34 years old) who are in need of support for rent deposit will be increased to KRW100 million per individual. It is expected that the increase in the maximum lending amount will help about 5,000 additional individuals annually. In addition, the Korea Housing Finance Corporations guarantee fees for jeonseloans will be reduced significantly to help ease financing burdens of lower income groups. Further Plan The previously announced planto increase the maximum jeonse amount from KRW500 million to KRW700 million for jeonse loans that are guaranteed by the Korea Housing Finance Corporation will go into effect in the second half of this year after preparing the data system and making changes to the relevant rules. In the second half of the year, the authorities will also look into ways to introduce longer term mortgage loans offered by private sector lenders. * Please refer to the attached PDF for details.
Jun 14, 2021
- Support for Vulnerable Debtors Extended until December 2021
- The FSC and relevant institutions along with all financial industry groups agreed to extend the period of support available for vulnerable debtors hit by the COVID-19 until the end of this year. (Pre-workout Programs) The application period for pre-workout programs offered by individual lending institutions will be extended until December 31, 2021. Individual (non-corporate) debtors at risk of overdue payments (less than three months) on loans due to a decline in income levels amid the pandemic may apply for pre-workout program at individual lending institutions. The pre-workout program will offer a payment deferral on the principal for six to twelve months and an opportunity to readjust payment schedule after the period expires. (Debt Adjustment by CCRS) Debt adjustment programs offered by the Credit Counseling Recovery Service will be available on a regular basis. (Individual Debt Purchase by KAMCO) The application period for individual debt purchase program offered by the Korea Asset Management Corporation (KAMCO) will be extended until December 31, 2021. KAMCO will purchase unsecured debt accrued between February 1, 2020 and December 31, 2021. Both lending institutions and individual debtors are eligible to apply until the end of this year. * Please refer to the attached PDF for details.
Jun 08, 2021
- Revision Proposal to the Enforcement Decree of Microfinance Support Act Sets Contribution Rates
- The FSC announced a revision proposal to the Enforcement Decree of the Microfinance Support Act and relevant regulation on June 8 in order to prescribe specific contribution rates for financial institutions making contributions to the pool of microfinance funds as required by the revised Microfinance Support Act. For the purpose of expanding the pool of microfinance funds available to help ease burdens of lower income households and expand microfinance opportunities for individuals with low credit backgrounds, the revision proposal sets the common contribution rate at 0.03 percent of the balance of household loans for each financial institution. The types of household loans that are subject to the contribution requirement by some other legislation, microfinance loans guaranteed by the Korea Inclusive Finance Agency (KINFA) and government-backed loans for lower income households are exempted from the contribution requirement. The revision proposal also sets differential contribution rates of 0.5 percent to 1.5 percent on the balance of guarantees based on each financial institution's subrogationratefrom the previous year. - Over 150%: 1.50% per annum - Over 100% ~ Up to 150%: 1.25% per annum - 100%: 1.00% per annum - Over 50% ~ Below 100%: 0.75% per annum - Up to 50%: 0.50% per annum The revision proposal also established specific details regarding the management and organization of the microfinance support center under a joint management by KINFA and Credit Counseling Recovery Service. The revision proposal will be put up for public notice for forty days from June 9 to July 19, 2021. * Please refer to the attached PDF for details.
May 31, 2021
- Authorities to Ease LTV Rules and Enhance Support for Rent to Help Strengthen Housing Ladder
- The FSC announced its plan to ease the loan-to-value (LTV) rules on mortgage loans and expand support for rent payments while taking steps to ensure an effective implementation of the household debt management plan introduced on April 29.The following measures are aimed at expanding financial support available to lower income households as well as young adults and newly married couples who are in actual need of housing. I. Mortgage Loans a) The non-homeowners annual income qualification to be given a preferential consideration will be increased from the current level of KRW80 million to KRW90 million for married couples and from KRW90 million to KRW100 million for first-time homebuyers. b) The maximum value of homes for which the annual income qualified individuals may apply will be increased from the currently level of KRW600 million to KRW900 million for homes located in overheated speculative areas and from the current level of KRW500 million to KRW 800 million for homes located in the areas that are subject to price adjustments. c) The additional benefit of maximum 10 percentage points in LTV ratio will also be increased to maximum 20 percentage points. II. Support for Vulnerable Groups a) For young adults, the maximum loan amount available for rent deposit will be increased from KRW70 million to KRW100 million per borrower through a housing guarantee program offered by the Korea Housing Finance Corporation. b) The maximum jeonseamount for which jeonse loans can be issued with a housing guarantee provided by the Korea Housing Finance Corporation at low interest rates and fees will be increased from KRW500 million to KRW700 million for Seoul metropolitan areas and from KRW300 million to KRW500 million for other regions. The maximum amount of jeonse loan a household can receive will remain at the same level of KRW220 million. c) The maximum loan amount available per borrower for long-term mortgage loan offered by the Korea Housing Finance Corporation for homes val
May 27, 2021
- Internet-only Banks to Increase Credit Lending to Individuals with Mid to Low Credit Standings
- The FSC announced a plan to boost internet-only banks credit-based lending to individuals with mid to low credit backgrounds from KRW2 trillion at the end of 2020 to about KRW4.6 trillion by the end of this year. Internet-only banks will gradually expand the proportion of their credit-based lending to those with mid to low credit standings with a goal of reaching more than thirty percent of their total balance of credit-based lending by the end of 2023. Internet-only banks will also seek to further improve their credit scoring systems to more properly evaluate individuals debt service capabilities based on more realistic customer data as well as alternative credit data. In this regard, the government will strengthen management and supervision over internet-only banks to ensure their implementation of the plan. * Please refer to the attached PDF for details.