Online Investment-Linked Finance Surpasses 300 Billion Won in Taxes...Full-Scale Discussions Begin on System Stabilization

National Assembly Forum on Measures to Promote Online Investment-Linked Finance

As the cumulative tax amount generated during the investment process of online investment-linked finance (hereafter referred to as “online investment-linked finance”) surpassed 300 billion won, a forum was held at the National Assembly to discuss institutional stabilization and the enhancement of inclusiveness in finance for low-income individuals.

Seoul Yeouido National Assembly Building. Photo by Jo Yongjun

According to political sources on March 26, Assemblyman Lee Jeongmoon of the Democratic Party of Korea, who hosted the “Forum on Measures to Activate Online Investment-Linked Finance” at the National Assembly Members’ Office Building, stated in his welcoming remarks, “Online investment-linked finance was introduced to supplement areas that conventional finance has not fully covered.” He added, “Although the market has shown steady growth since the implementation of the system, concerns persist that the proportion of real estate-related loans remains high, while the provision of funding for personal credit loans and small and medium-sized enterprises has not met expectations.”

Assemblyman Lee continued, “What is needed now is not mere quantitative expansion, but a thorough revision of the system to ensure soundness and user protection so that the industry can properly fulfill its intended function.” He emphasized, “If online investment-linked finance can supplement unmet demand that traditional financial institutions cannot sufficiently address, and faithfully perform new screening and brokerage functions based on technology and data, it can become an important pillar that enhances the diversity and resilience of our financial market.”

In his congratulatory remarks, Hong Jaemoon, President of the Online Investment-Linked Finance Association, stated, “Since the enactment of relevant legislation in 2019 and the incorporation into the formal financial system, online investment-linked finance has established itself as a pillar of inclusive finance by providing funds to borrowers with mid- to low-credit ratings and financially marginalized groups.” He added, “However, due to the rapid changes in the financial environment, the industry is now facing significant challenges.”

Seok Jiwoong, a professor of law at Sungkyunkwan University and a presenter at the forum, proposed “relaxing investment limits for institutional and individual investors and preventing fraudulent acts by borrowers” in order to improve regulation of the domestic online investment-linked finance market. He also suggested that “even if the initial target amount for a linked loan is not met, the loan should still be executed for the collected amount, by providing advance notice through the investment prospectus.”

Additionally, he recommended increasing flexibility in loan execution, easing self-investment limits, activating the secondary market for claims on principal and interest, and securing flexibility in business models.

This forum was co-hosted by Assemblymen Kim Seungwon, Min Hyungbae, Ahn Dogeol, Lee Kangil, Lee Jeongmoon, and Heo Young of the Democratic Party, with the Online Investment-Linked Finance Association serving as the main organizer, and supported by the Korea Fintech Industry Association and the Digital Economy and Finance Research Institute. The forum was chaired by Jeong Yusin, Director of the Digital Economy and Finance Research Institute. Discussion panelists included Jeong Seonin, Head of Digital Finance Policy at the Financial Services Commission; Seo Byeongho, Head of Financial Innovation Research at the Korea Institute of Finance; Lee Jeongmin, attorney at Kim & Chang; and Lee Hyojin, CEO of 8Percent, as well as other experts representing government agencies, industry, the legal sector, and research institutions, who engaged in discussions on practical alternatives to vitalize online investment-linked finance.

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