6-Month Interest-Free Debt Repayment Deferral for Vulnerable Groups Affected by COVID-19

Financial Services Commission Chairman Eun Sung-soo attended the COVID-19 response party-government-Cheong Wa Dae meeting held at the National Assembly on the 11th, listening to Chairman Lee Nak-yeon's remarks with a serious expression. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Kangwook Cho] Measures to reduce the debt burden on vulnerable groups, such as a six-month interest-free debt repayment deferral in case of damage caused by the spread of the novel coronavirus infection (COVID-19), are being promoted.

The Financial Services Commission announced on the 11th that those affected by COVID-19 can apply for repayment deferral of funds from the Credit Recovery Committee, Korea Asset Management Corporation (National Happiness Fund), and Microfinance.

Accordingly, debtors who are currently fulfilling debt adjustment agreements with the Credit Recovery Committee and Korea Asset Management Corporation (including the National Happiness Fund) and are recognized as having a "decrease in income due to COVID-19" can receive a repayment deferral (interest-free) for up to six months.

Also, microfinance loan users, including merchants using small loans in traditional markets, who have a "decrease in income due to COVID-19" can receive a six-month principal repayment deferral. For credit card small merchants in special infectious disease control areas such as Daegu, Cheongdo, and Gyeongsan, interest payments will also be supported during the deferral period.

In both cases, no monthly repayment during the deferral period will not cause any separate disadvantages such as changes in credit rating.

The Financial Services Commission plans to apply the criteria for recognizing income reduction due to COVID-19 as broadly as possible and to accept applications mainly through online channels, conduct simplified reviews, and confirm them quickly. The Korea Inclusive Finance Agency, Credit Recovery Committee, and Korea Asset Management Corporation will send guidance messages about this system to debtors.

In addition, the Financial Services Commission plans to allocate an additional 5 billion KRW in special microfinance funds for traditional market merchants (with a limit of 10 million KRW per person). Of the 5 billion KRW in special funds additionally allocated on the 7th of last month, 4.3 billion KRW has already been used.

A Financial Services Commission official said, "Even if processing is delayed due to a surge in application demand, we will minimize inconvenience by applying the support system retroactively."

This content was produced with the assistance of AI translation services.