"What Do You Think About Changwon's 'Marriage Dream Loan' Offering 100 Million Won Loan and Full Forgiveness After Having Three Children?"

Changwon-si, Gyeongnam Offers Up to 100 Million Won Loans to Young Couples
Radical Policies Including Full Loan Forgiveness for Having Three Children
Experts Say "Cash Support is Good but Lacks Practical Effectiveness"

On the 6th, Changwon City in Gyeongnam announced the establishment of the 'Task Force (TF) Team to Protect the Population of 1 Million' and plans to promote three major projects, including the introduction of the Marriage Dream Loan.
Photo by Yonhap News

[Asia Economy Reporter Kang Juhee] Changwon City in Gyeongnam Province announced that it will implement a childbirth encouragement policy that guarantees marriage loans up to 100 million won for local residents and fully forgives the loan if they have three children, sparking controversy over the policy's effectiveness.

While many evaluate it as a good policy in that it provides a support foundation for people reluctant to have children due to economic difficulties, there are also considerable criticisms that cash support cannot be a solution to the low birthrate problem.

Experts also acknowledge the positive intent of cash support but diagnose that its effectiveness in actually resolving the social issue of low birthrate needs to be thoroughly examined.

On the 6th, Changwon City announced that it has established a 'Population 1 Million Defense Task Force (TF) Team' to promote three major projects: the introduction of the Marriage Dream Loan, a corporate attraction project, and the expansion of settlement support funds for having a Changwon address.

In particular, the Marriage Dream Loan drew attention as it includes providing up to 100 million won in cash support to young people who marry and have children. The main details include lending 100 million won needed for couples getting married, waiving interest if they have one child within three years, forgiving 30% of the loan if they have two children within ten years, and fully forgiving the loan if they have three children within ten years.

This policy by Changwon City appears to be aimed at meeting the population standard of 1 million as the 'special city' status is set to launch in January next year. When Changwon City was integrated with Masan City and Jinhae City in 2010, the population was 1.09 million, but as of November last year, the population was 1.037 million, on the verge of falling below 1 million. Changwon City plans to increase the population by 10,000 annually through this project.

Changwon City Hall exterior./Photo by Yonhap News

However, some citizens expressed doubts about the effectiveness of such policies, pointing out that creating an environment conducive to childbirth is more important than cash support.

Office worker Park (35) said, "Recently, many people are reluctant to have children," adding, "I don't know if this policy can encourage people who have given up on having children to actually give birth. Raising children costs much more than this. Unless the social structural environment changes, I don't think such policies will have a significant effect."

On the other hand, some believe it will help couples who want to have children. Office worker Kim (31) said, "For couples who plan to have children or want multiple children but have not been able to due to economic burdens, this seems like a good policy. Since a lot of money is needed early in marriage, such support will be a great help."

Changwon City stated that it is reviewing this policy with the goal of making it a national policy to solve the low birthrate problem. A Changwon City official said in a phone interview with Asia Economy on the 7th, "The government has implemented various policies, but ultimately could not stop the population decline," adding, "Therefore, Changwon City is currently reviewing measures focused on childbirth to reduce burdens such as initial marriage costs like monthly rent deposits and childcare costs at childbirth."

He continued, "Hungary is a successful case where about 40 million won per year was supported to increase the birthrate. Adjusted to our country's circumstances, that would be about 100 million won," emphasizing, "The ultimate goal is for Changwon City to successfully implement this policy so that it can become a national policy."

[Image source=Yonhap News]

However, the city added that procedures such as approval from the Ministry of Health and Welfare and agreement with decision-making bodies remain, and there may be changes during future review processes.

While the intent of cash support is positive, experts caution that the effectiveness of this policy until actual support is realized may not be sufficient.

Professor Gu Jungwoo of the Department of Sociology at Sungkyunkwan University said, "The policy's intent and direction are positive in that it can create a foundation for cash support because the 2030 generation is in an economically difficult situation and cannot afford to raise children considering childbirth costs," but added, "From the citizens' perspective, they might wonder if they have to have multiple children just to receive 100 million won. Ultimately, it is a form of debt in the shape of a loan and seems more like a facade."

There are also criticisms that cash support cannot be a fundamental or long-term solution to the low birthrate problem. Professor Kim Taegi of Dankook University's Department of Economics suggested, "The low birthrate problem cannot be solved by simply distributing funds. Policies that create an environment where young people can obtain job opportunities and companies can create jobs must accompany it."

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