Lee Jae-myung "Welcome the reduction of the legal maximum interest rate from 24% to 20%... It should be lowered further"

"Welcoming, but Loan Interest Rates Need to Be Lowered Further"

[Image source=Yonhap News]

[Asia Economy Reporter Park Sun-mi] Regarding the government's and ruling party's decision to lower the current statutory maximum interest rate from 24% to 20%, Lee Jae-myung, Governor of Gyeonggi Province, expressed his welcome but also argued that the interest rate needs to be lowered further.

On the 16th, Governor Lee stated on Facebook, "The ruling party and government have decided to reduce the maximum interest rate from 24% to 20%. Lowering the usurious high interest rate by 4 percentage points is a significant progress and a welcome move."

However, he explained, "Even during the Park Chung-hee era with a growth rate in the 10% range, the maximum interest rate was 25%. Allowing 24% or 20%, which is more than 20 times the growth rate, in an era of zero percent growth makes one question whether this is a civilized country. A maximum interest rate of 10% is already excessive."

He continued, "For the economy to revive, for ordinary people to survive, and for the country to thrive, loan interest rates must be lowered further. Illegal lending must be invalidated to prevent inhumane exploitation in the illegal loan market, and to guarantee the basic financial rights of all people according to the principle of inclusive finance, we must move toward basic loans."

Governor Lee said, "Basic loans, which supply long-term low-interest funds where money is needed, are a triple-benefit complex policy that alleviates the financial burden on ordinary people, reduces income polarization, and revitalizes the economy. Approximately 2 million users of high-interest loans at a maximum of 24% have an average loan amount of about 8 million won and an average interest rate in the 20% range. If all citizens, including these users, are given the opportunity for long-term loans of up to 10 million won at an annual interest rate in the 2% range, the loss, when distributed annually, would not be a significant burden each year."

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