FSS Urges Small and Medium-Sized Financial Sector to Expand Mid-Rate Loans for Regions and Low-Income Individuals

2026 Financial Supervision Briefing for the Small and Medium-sized Financial Sector

The Financial Supervisory Service has urged the small and medium-sized financial sector to expand funding, including mid-rate loans, in order to support regions and low-income individuals struggling with polarization.

On March 16, the Financial Supervisory Service announced this at the "2026 Financial Supervision Business Briefing for the Small and Medium-sized Financial Sector" held at its Yeouido headquarters in Seoul. The event was attended by approximately 200 executives and employees from savings banks, cooperative finance institutions, credit-specialized financial companies, value-added network (VAN) firms, and related central organizations and associations.

Lee Jin, Deputy Governor of the Financial Supervisory Service for Small and Medium-sized Finance, assessed, "Although the industry has faced a difficult management environment in recent years due to sluggish real estate markets, soundness is gradually recovering thanks to the industry's proactive self-rescue efforts." He added, "There is a need to prepare for prolonged uncertainty due to the recent situation in the Middle East and U.S. tariff policies. This is a crucial time for fulfilling the core role of the small and medium-sized financial sector while responding swiftly to changes in the environment."

Deputy Governor Lee called for regionally focused operations and expansion of mid-rate loans to ensure the supply of funds needed by the local economy and low-income individuals. He also requested that consumers' rightful claims—such as the right to request interest rate reductions and the right to withdraw loan applications—be guaranteed.

In addition, he stressed the need to quickly dispose of assets whose soundness has deteriorated, such as non-performing project financing (PF), and to strengthen soundness through sufficient provision accumulation and capital expansion. He further emphasized that internal control systems must be further enhanced to prevent a decline in overall trust in the industry due to financial accidents.

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