[Exclusive] Delivery Riders Who Struggled to Borrow Money to Get Dedicated 'Policy Loans'

Seomin Financial Services Agency and Barogo Initiate Recent Practical Consultations
Interest Rates and Limits Expected to Be Similar to Existing Policy Financial Products
Approximately 32,000 Barogo Riders Anticipated to Benefit

[Asia Economy Reporter Song Seung-seop] The Korea Inclusive Finance Agency has begun developing loan products targeted at delivery riders, whose numbers have exploded since the COVID-19 pandemic. This is part of support measures for delivery riders who often face disadvantages in personal credit evaluations due to difficulties in proving fixed income.

According to financial authorities and industry insiders on the 2nd, the Korea Inclusive Finance Agency recently held working-level consultations with the Rider Happiness Team of the delivery platform "Barogo" to develop new loan products. This department is responsible for the welfare and treatment of affiliated riders. It is the first time a government agency, rather than a private bank, is creating loan products specifically for the rider occupation.

It is being seriously considered that Barogo will either handle the income verification process on behalf of the riders or simplify the procedures through Barogo. Most of the Korea Inclusive Finance Agency’s policy loan products, such as Saessal Loan and Safety Net Loan, require employment and income verification. Those not enrolled in health insurance, receiving cash wages, or unregistered business operators must visit the Korea Inclusive Finance Integrated Support Center in person.

32,000 Riders to Benefit... "Interest Rates and Limits Similar to Policy Loans"

If Barogo, which can grasp the income status of its affiliated riders, simplifies the loan screening process, convenience is expected to improve significantly. Previously, the time required for document verification caused riders in urgent need of funds to avoid policy financial products or remain unaware of government-supported financial products, leading them to high-interest loan companies. Some riders were even rejected during the screening process despite having income. With this policy, about 32,000 riders affiliated with Barogo are expected to receive direct benefits.

Barogo also stated that, given the high number of low-credit riders in the industry, collaboration with policy inclusive finance institutions was necessary. A Barogo official said, "There was a proposal from private banks to develop loan products with better conditions than policy financial products," adding, "However, private banks have a high likelihood of rejecting riders with weak financial capacity during loan screening, so we considered developing policy financial products that can be as inclusive as possible."

Interest rates and limits are expected to be set similarly to existing policy financial products such as Saessal Loan. If the criteria are stricter than other financial products, the attractiveness decreases, and if only rider-targeted products have better benefits, there could be backlash. Therefore, there is also a proposal to simplify only the process while having the actual loan execution done through existing policy financial products, including Saessal Loan. The product name and specific launch schedule are under discussion.

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