Surge in Living Stability Loans... "From Today, Delivery Workers Without Industrial Accident Insurance Can Also Apply"

Surge in Worker Livelihood Stabilization Loan Applications Due to COVID-19 Spread
IBK Expands Eligibility for Worker Livelihood Stabilization Loans Starting from the 8th

[Asia Economy Reporter Park Sun-mi] Amid growing economic anxiety due to the spread of the novel coronavirus infection (COVID-19), the scale of the Worker Living Stabilization Fund Loan, a representative financial product for low-income workers, has surged. In response, IBK Industrial Bank of Korea announced that starting from the 8th, it will expand the support targets for the Worker Living Stabilization Fund Loan to include delivery transport workers, private tutor teachers, and others.

According to Industrial Bank of Korea, the new loan amount for the Worker Living Stabilization Fund Loan from January to November this year is 236.3 billion KRW. Although the December amount has not yet been added, this is about twice the 137 billion KRW for the entire period from January to December last year.

This year, the impact of COVID-19 is significant. In January this year, the new loan amount for the Worker Living Stabilization Fund Loan was only 12.4 billion KRW, lower than the 15.2 billion KRW in January last year. However, as of November, this year’s amount reached 40 billion KRW, greatly surpassing the 16.8 billion KRW in November last year by more than double. Even on a cumulative basis, the new loan amount for the Worker Living Stabilization Fund Loan began to exceed that of the same period last year starting from March this year, when the spread of COVID-19 became full-scale.

What is the Worker Living Stabilization Fund Loan?

The Worker Living Stabilization Fund Loan is a financial product for low-income workers launched in 2008 through a sole agreement between Industrial Bank of Korea and the Korea Workers’ Compensation and Welfare Service. The loan is supported with a full credit guarantee from the Korea Workers’ Compensation and Welfare Service. Until now, only low-income workers and some special-type workers in 13 occupations covered by industrial accident insurance could receive this living stabilization fund loan.

However, reflecting the COVID-19 crisis situation, Industrial Bank of Korea expanded the support targets for the Worker Living Stabilization Fund Loan starting from this day. Approximately 2 million people, including special-type workers not enrolled in industrial accident insurance such as delivery transport workers, private tutor teachers, insurance salespersons, and one-person business owners enrolled in industrial accident insurance, have been added as eligible for the Worker Living Stabilization Fund Loan.

The loan targets are workers who have been employed at their current workplace for more than three months and whose average monthly income in the previous year is less than two-thirds of the median income (2.59 million KRW based on 2020), all special-type workers, and one-person business owners enrolled in industrial accident insurance. The loan limit is up to 20 million KRW, with an interest rate of 1.5% per annum (excluding guarantee fees), and can be used for up to 8 years. Repayment must be made in equal principal installments, and early repayment penalties are fully waived.

Once the customer applies for a guarantee with the Korea Workers’ Compensation and Welfare Service and approval is confirmed, loan applications can be made through internet banking and the i-ONE Bank application (app). A representative from Industrial Bank of Korea stated, "We hope that special-type workers receive timely financial support during the COVID-19 crisis to help stabilize their livelihoods in a practical way."

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