Gyeonggi Province Accelerates Establishment of 'Gyeonggi Seomin Financial Foundation,' Lifeline for Working-Class Funds

[Asia Economy (Suwon) = Reporter Lee Young-gyu] The establishment of the 'Gyeonggi Saemin Financial Foundation' (tentative name), which will serve as a financial lifeline for low-income residents of Gyeonggi Province, is gaining momentum.

Gyeonggi Province announced on the 10th that the results of the feasibility study for establishing the Gyeonggi Saemin Financial Foundation, jointly conducted with the Local Public Enterprise Evaluation Institute since March, have recently been released, and based on this, the foundation is planned to be officially launched as early as June next year.

Since April last year, under the direction of Governor Lee Jae-myung of Gyeonggi Province, the province has introduced a super-low credit loan system, providing loans up to 5 million won. However, due to the absence of a specialized financial institution, the project has faced difficulties, and the province is pushing for the establishment of the foundation to carry out more active support projects for financially vulnerable groups within the province.

According to the results of this study, the foundation will comprehensively implement 'financial welfare' policies to protect financially vulnerable groups in the province. In particular, separate from financial support projects, it will also carry out protection projects for low-income residents suffering from excessive debt through financial consulting and linkage to welfare services.

The initial endowment for the foundation's establishment, including basic assets, is about 20 billion won. The entire endowment is funded by the provincial government.

Thereafter, the province will contribute an average of approximately 16.9 billion won annually over five years. This is about 107.2% of the average endowment of provincial investment and contribution institutions. The province considers the scale of the endowment not excessive based on the feasibility study results.

The estimated economic ripple effect on the local economy over five years after the foundation's establishment is about 5.28 billion won. Additionally, a value-added effect of about 2.94 billion won is also expected.

A provincial official explained, "Based on these results, we need to undergo review by the Ministry of the Interior and Safety. Afterwards, we will proceed with procedures such as ordinance enactment, provincial funding, and registration of establishment, aiming to start operations in June next year."

The foundation will operate initially with one headquarters, five teams, one center, and a staff of 72.

The Local Public Enterprise Evaluation Institute, which conducted the study, expected that if the foundation is newly established, it will be possible to provide comprehensive financial welfare services to low-credit individuals in financial welfare blind spots and develop various new projects.

However, it also expressed concerns that the initial investment cost is large and there is a possibility of a negative impact on local finances. This is because an increase in fixed endowments for loans could significantly affect the rigidity of local finances.

Meanwhile, a survey related to the Gyeonggi Saemin Financial Foundation was conducted from June 15 to 24 with 705 residents of the province, revealing that 63.8% of respondents support the establishment of the foundation.

Regarding the expected effects of the foundation's establishment, 79.1% of respondents cited "it helps improve the economic conditions and welfare of financially vulnerable groups."

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