[BoK Big Step] Ruling Party "Concerns Over Household Debt and Small Business Interest Burden... Request to Expand Support Scale" (Comprehensive)

Loan Support Scale for Small Business Owners and
Measures Requested for Debt Adjustment of Over-Indebted Borrowers

Kwon Seong-dong, Acting Leader of the People Power Party, is attending the Supreme Council meeting held at the National Assembly on the 14th and is talking with Supreme Council member Bae Hyun-jin during the meeting. Photo by Yoon Dong-joo doso7@

[Asia Economy reporters Hyunju Lee, Boryeong Geum, Hyunji Kwon] On the 14th, the People Power Party announced that it will focus on expanding loan support for small business owners and self-employed individuals in response to the Bank of Korea's decision to raise the base interest rate by 0.5 percentage points, as well as preparing various support policies such as debt adjustment measures for marginal borrowers including the 'Yeongkkeuljok' (those who borrow to the limit).

Kwon Seong-dong, acting party leader and floor leader of the People Power Party, said at the Supreme Council meeting held that day, "Due to the soaring housing prices during the previous administration, the interest burden on the 30-40 generation who purchased homes and on small business owners and self-employed individuals who barely managed by borrowing during the prolonged COVID-19 situation is inevitably increasing."

Acting leader Kwon said, "Regarding mortgage loans, we have already requested the government to further expand the refinancing loan scale that converts existing high variable interest rates into fixed interest rates from 20 trillion won."

After the Supreme Council meeting, Acting Leader Kwon told reporters, "Currently, variable interest rates on real estate collateral loans and mortgage loans under 400 million won are very high and burdensome," adding, "To convert these to fixed interest rates, a budget was reflected in the last supplementary budget, and 20 trillion won will be invested this year and another 20 trillion won next year, but even so, it cannot cover all individuals with mortgage or real estate collateral loans under 400 million won." He continued, "I have requested the government to increase the scale, and I understand the government is reviewing it. If expanded further, it will help low-income households, especially those who have housing loans taken out through Yeongkkeul (borrowing to the limit)."

Seong Il-jong, chairman of the Policy Committee, also said at the Supreme Council meeting that day, "As already requested to the government, we ask again to significantly expand the scope of safe conversion loans for houses priced under 400 million won, converting variable interest rates of 7-8% to fixed rates in the 4% range," adding, "The scale of 20 trillion won this year and 20 trillion won next year needs to be increased."

Kwon Seong-dong, floor leader of the People Power Party, is attending the party floor strategy meeting held at the National Assembly on the 8th and is talking with Sung Il-jong, chairman of the policy committee, during the meeting. Photo by Yoon Dong-joo doso7@

He said, "The Bank of Korea's decision to raise the base interest rate was an unavoidable choice to somewhat curb the soaring inflation, but it is also true that the interest burden on ordinary people is increasing," noting, "Household debt in the first quarter already stands at 1859.4 trillion won, with variable interest rates accounting for 77% of household debt."

Chairman Seong of the Policy Committee said, "Through the supplementary budget in May, we have secured budgets for various financial support projects for ordinary people and are implementing them," mentioning safe conversion loans, Korea Asset Management Corporation (KAMCO) debtor adjustment support measures, special guarantee projects for low-credit borrowers, the Sunshine Loan Youth program for low-income young people, refinancing loans for small business owners, and customized new fund support. He added, "We have promised to improve the disclosure system for the interest rate spread between deposits and loans, and the People Power Party will promptly complete the establishment of a refinancing loan platform."

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