Financial Sector Provides Consumer Benefits Worth 1.1479 Trillion Won Through 'Sangsaeng Finance'

#A in their 20s, a social newcomer working at a medical institution, had insufficient income and found it difficult to obtain bank loans, resulting in holding 15 card loans. A was deeply worried about the high-interest burden and the declining credit score each time they took out a card loan. Through a win-win financial product, A was able to secure a bank loan with low interest and a loan limit of 30 million KRW, refinancing the 15 card loans into one bank loan.

On the 24th, the Financial Supervisory Service (FSS) announced that the total benefits consumers will receive from win-win finance, aimed at households, small and medium enterprises, and small business owners to reduce principal and interest repayment burdens, amount to 1.1479 trillion KRW. The scale includes 952.4 billion KRW from banks and 195.5 billion KRW from specialized credit finance companies. Based on the amount of loans and deposits handled, the total is about 63.9 trillion KRW. The performance executed by the end of last month is estimated at around 470 billion KRW, and the number of consumers who benefited is approximately 1.74 million based on the banking sector.

In the banking sector, support was provided to vulnerable borrowers and small business owners by reducing financial burdens through interest rate cuts and maturity extensions, contributing to alleviating initial funding difficulties for businesses. By the end of August, the benefits returned to consumers amounted to about 438.7 billion KRW, which is 46.1% of the banking sector’s target expected effect (952.4 billion KRW). The support effect for general household borrowers is estimated at 205 billion KRW, and for vulnerable borrowers about 69.7 billion KRW. Support for small and medium enterprises and small business owners is estimated at approximately 126.2 billion KRW, while other support effects, including victims of voice phishing and the elderly, amount to about 37.8 billion KRW.

In the specialized credit finance sector, support was provided to borrowers in difficult situations by assisting with debt repayment and offering low-interest new loans to relieve urgent funding shortages. The actual consumer benefits such as interest reductions in this sector reached 31.3 billion KRW by the end of August, with an execution rate of about 16%. The insurance sector developed and launched three win-win insurance products to protect and support families preparing for childbirth, youth, and vulnerable children.

The FSS stated that such win-win finance in the financial sector is expected not only to manage asset soundness by preventing borrower delinquency and defaults but also, in the long term, to expand the customer base and sustain the stable growth of financial companies. The FSS added, "We will continue to actively strive to ensure that win-win finance measures are executed promptly and early, and we plan to strengthen support infrastructure so that win-win finance can be pursued more systematically and continuously."

Financial Supervisory Service, Yeouido, Seoul. Photo by Jinhyung Kang aymsdream@

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