[2021 National Audit] "Hetsalron Also Has Extremely High Interest Rates, Interest Burden on Ordinary People Must Be Reduced"

Yoon Doo-hyun, Member of the People Power Party

[Asia Economy Reporter Song Seung-seop] It has been identified that a significant portion of the Worker’s Sunshine Loan in the savings bank sector is conducted through loan brokers. Since commissions must be paid when going through loan brokers, concerns have been raised that the interest burden on low-income borrowers using the Sunshine Loan has effectively increased.

On the 15th, Yoon Doo-hyun, a member of the National Assembly’s Political Affairs Committee from the People Power Party, pointed out to Lee Gye-moon, President of the Korea Inclusive Finance Agency, who attended the National Assembly audit held that day, “Low-income people want to receive financial services within the institutional framework, but due to lack of information, they use policy-based low-income finance through an intermediary step called loan brokers,” adding, “The proportion of loans supported through this route reaches half.”

According to data submitted by the Korea Inclusive Finance Agency to Yoon’s office, from January last year to June this year, the scale of Worker’s Sunshine Loan loans made through brokers in the savings bank sector reached 213.1964 trillion won, accounting for 45.7% of the total, the largest share. Loans made through intermediary platforms amounted to 114.6776 trillion won (24.5%), those through the bank’s own internet and mobile channels were 108.5317 trillion won (23.2%), and loans via counters and telephone were 30.5171 trillion won (6.5%).

When handling Sunshine Loans, savings banks pay commissions to loan brokerage agents. Yoon Doo-hyun explained, “According to the loan brokerage commission calculation standards, it is estimated that up to 262,500 won per year is paid as commission for brokering a loan of 10 million won.” This is why criticism arises that the brokerage commission fees are effectively passed on as a burden to low-income people using policy finance.

Yoon also stated, “Looking at the average interest rates, safety net loans reach 17.1%, Sunshine Loan 15 is 15.9%, and Worker’s Sunshine Loan is 7.53%,” adding, “Although lower than illegal private loans, these are extremely high interest rates.”

He further criticized, “These rates are too high to be considered policy finance for low-income people,” and said, “It is the role of the Korea Inclusive Finance Agency to improve operational efficiency or reform the system to reduce the interest burden on low-income borrowers by even just 1 percentage point.”

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