Haetsal Loan Bank to Launch First Phase on 26th This Month... Targeting 300 Billion KRW Supply by Second Half

Sunshine Loan Bank Agreement Ceremony and Meeting on the 1st
Chairman Eun Seong-su Urges Banks to Actively Support the Use of Sunshine Loan Bank

[Asia Economy Reporter Park Sun-mi] The financial product "Haetsal Loan Bank," designed to alleviate the financial difficulties of low-income and low-credit groups following the reduction of the legal maximum interest rate (from 24% to 20%), will be launched in its first phase by the end of this month. The goal is to supply 300 billion KRW during the pilot operation in the second half of this year. Customers can use funds with an interest rate (including guarantee fees) ranging from 4.9% to 8%, within a maximum limit of 20 million KRW.

According to financial authorities on the 1st, at 2:30 PM, a Haetsal Loan Bank agreement ceremony and meeting were held at the Korea Inclusive Finance Agency, with participation from related organizations such as the Korea Inclusive Finance Agency, the Korea Federation of Banks, and 13 banks including BNK Gyeongnam, Gwangju, KB Kookmin, IBK Industrial, NH Nonghyup, DGB Daegu, BNK Busan, SH Suhyup, Shinhan, Woori, Jeonbuk, Jeju, and Hana.

Haetsal Loan Bank is a "stepping stone" type product that supports low-credit and low-income citizens who have used policy-based inclusive financial products to settle in the banking sector through debt or credit improvement. Ahead of its first launch, 13 banks have participated in the release of Haetsal Loan Bank, utilizing contributions from the banking sector's inclusive finance fund scheduled for October. The first phase is planned to be launched on the 26th by IBK Industrial, NH Nonghyup, Jeonbuk, and BNK Gyeongnam banks, with other banks expected to launch sequentially within the year.

Haetsal Loan Bank aims to supply 300 billion KRW during the pilot operation through the second half of the year. The target beneficiaries are low-income and low-credit citizens who have used policy-based inclusive financial products for more than one year and have improved their debt or credit status. The main targets are low-income and low-credit citizens with an annual income of 35 million KRW or less (regardless of credit score), or those within the bottom 20% of credit scores with an annual income of 45 million KRW or less.

Depending on the degree of credit and debt improvement, loans are provided up to a maximum limit of 20 million KRW. Funds can be used without restrictions for specific purposes such as living expenses, and repayment is made through principal and interest installments over 3 or 5 years (with a grace period of up to 1 year). There is no prepayment penalty, similar to other policy-based inclusive financial products. Although interest rates vary by Haetsal Loan Bank agreement banks, customers will bear an interest rate (including guarantee fees) ranging from 4.9% to 8%. Banks will also autonomously provide additional support such as preferential interest rates for faithful repayment (up to 0.3%p per year).

At the Haetsal Loan Bank agreement ceremony and meeting held that day, Eun Sung-soo, Chairman of the Financial Services Commission, urged active support from the banking sector for many low-income citizens to use Haetsal Loan Bank, emphasizing "Through the launch of Haetsal Loan Bank, low-credit and low-income individuals who previously had difficulty using banks will have the opportunity to engage in banking transactions if they faithfully repay existing policy-based inclusive financial products."

He added, "We will monitor actual demand during the pilot operation period, improve any shortcomings, and prepare supply plans for Haetsal Loan Bank next year," emphasizing, "The government will also oversee the execution status to ensure that Haetsal Loan Bank is sufficiently supplied and easily accessible to citizens."

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