Vice Minister Ki Jae: "Promoting Financial Support for Ordinary People Amid Prolonged COVID-19... Crackdown on Illegal Private Loans"

Lee Eok-won, First Vice Minister of the Ministry of Economy and Finance, is speaking at the '23rd Innovation Growth Strategy Review Meeting, COVID-19 Policy Review Meeting, Korean New Deal Review Task Force, and 17th Price-Related Vice Ministers' Meeting' held at the Government Seoul Office on the 9th.
[Photo by Yonhap News]

[Sejong=Asia Economy Reporter Son Seon-hee] Lee Eok-won, the 1st Vice Minister of the Ministry of Economy and Finance, said on the 9th, "As the COVID-19 crisis prolongs, meticulous financial support is needed to alleviate the burden on ordinary citizens," adding, "We plan to operate a four-month government-wide special eradication period to conduct intensive crackdowns on illegal private loans."

On the same day, Lee held the '23rd Innovation Growth Strategy Review Meeting, Policy Review Meeting, Korean New Deal Review Meeting, and 17th Vice Ministerial Meeting on Prices' at the Government Seoul Office, stating, "We are promoting detailed supplementary measures so that ordinary citizens do not face difficulties in using formal financial institutions."

From the 7th, the legal maximum interest rate was lowered from the existing 24% to 20%. Accordingly, the government will supply refinancing products (Safety Net Loan II) worth 300 billion KRW for existing high-interest loans. Additionally, the interest rate for the lowest credit borrowers under the Sunshine Loan 17 was reduced by 2 percentage points from 17.9%, launching the 'Sunshine Loan 15.'

Lee said, "We will revise the requirements so that mid-interest loans are supplied mainly to middle- and low-credit borrowers, and plan to expand the proportion of credit loans for middle- and low-credit borrowers by internet-only banks to over 30% by the end of 2023," adding, "We will also lower the brokerage fee cap by 1 percentage point to expand loans from lenders, and provide incentives such as allowing bank borrowing by selecting excellent lenders in the microfinance sector."

In particular, to prevent illegal private loans from spreading following the reduction of the legal maximum interest rate, special crackdowns will be conducted from this month until the end of October.

Lee said, "We will continue to strengthen financial support by launching new policy microfinance products such as Sunshine Loan Bank and Sunshine Loan Card, and build an infrastructure for refinancing loans across all financial sectors that enables non-face-to-face, one-stop refinancing loans to support low-interest refinancing, doing our best to improve financial accessibility for ordinary citizens."

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