South Korea's Financial Services Commission Seeks Increased Budget for Inclusive Finance to Reduce Borrowing Costs for Vulnerable Groups.
The Financial Services Commission (FSC) in South Korea has requested a significant increase in the budget for inclusive finance projects. This proposal, submitted to the National Policy Committee, aims to lower interest burdens for vulnerable groups, including mid- to low-credit borrowers and low-income individuals who struggle to access formal finance. The FSC specifically asked for an additional 245.5 billion won to be added to the government's planned 82.8 billion won for a "faithful payer interest payback program" under the Sunshine Loan special guarantee. This program would refund 50% of the interest paid at year-end to borrowers who have faithfully repaid for at least one year, effectively reducing the annual interest rate from 12.5% to around 6.3%. The FSC also proposed lowering rates on the Stepping Stone Loan to within 6% by covering 3 percentage points of loan interest with government finances, which could bring the average rate to the 4% range. Additionally, a 100 billion won budget increase was...
