The government will expand the portion of credit loans to medium and low-credit banks by more than 30%, and cut the Sunshine Loan 17 interest rate by 2 percentage points for the lowest-credit borrowers.
“We will launch the Sunshine Loan 15 by supplying safety net loan III, an alternative product for existing high-interest loans, which exceeds 20% a year, to ease the burden on ordinary people, down 2 percentage points from 17.9% by 2 percentage points,” said Lee Eok-won, the first vice minister of the Ministry of Strategy and Finance, attending the ” Innovation Growth Strategy Meeting and Policy Inspection Meeting and the Korea Version New Deal Inspection Meeting and Price Relations Vice Ministers’ Meeting” held at the Seoul Government Complex on the 9th.
This is the second measure of pressure from the financial authorities following the Financial Services Commission’s announcement earlier in May that it would penalize Internet banks in approving and licensing 폰테크 new businesses if they do not raise the portion of loans to mid- and low-credit borrowers among credit loans from 12 percent at the time to more than 30 percent at the end of 2023.
“We will revise the requirements so that medium-interest loans are supplied mainly to mid- and low-credit borrowers,” vice-minister Lee said. “We will give incentives such as lowering the ceiling on brokerage fees by 1 percentage point and selecting the best lenders for the working class to allow bank loans.”.
On the same day, the government announced its plan to do its best to enhance financial accessibility for ordinary people by supporting the repayment of low interest rates by establishing an alternative loan infrastructure for the entire (全) financial sector that allows non-face-to-face and one-stop alternative loans, while operating a four-month pan-government special eradication period until October.
“We think there will be a balloon effect after the DSR expansion, but we need to know over time how much it will be distributed by each industry,” an official from the financial sector said. “There is no significant change in figures because loans actually take at least a few days to weeks to execute loans compared to deposits. We need more time to be reflected in the market.”.
“Compared to other financial companies, there are no other credit policies and government policies are changing, so it is necessary to respond flexibly,” another official from the mutual financial sector said. “Other than that, the total amount of loans itself is large, so risk management is important.”.
The total credit of savings banks also reached 77.6 trillion won last year, up 19.4 percent (12.6 trillion won) from 65 trillion won a year earlier. Among them, household loans rose 21.1% (5.5 trillion won) to 31.6 trillion won, with credit loans at the center, while corporate loans jumped 16.1% (6 trillion won) to 43.2 trillion won.
However, there are as many concerns as increased loans. An official at a savings bank said, “Since the legal maximum interest rate has been lowered to 20 percent and savings banks have total regulations, it is honestly difficult to increase loans until the third quarter of this year, but we don’t know how aggressive operation will be carried out in the fourth quarter, but at the moment, we don’t know how big the risk will be.”.