Financial Sector to Provide 2 Trillion Won to Social Solidarity Economy Organizations This Year... Expanding Inclusive Finance

Expansion of "Smile Finance" and Preferential Guarantees
Banks to Newly Supply 4.3 Trillion Won Over Three Years

The government, together with public and private financial institutions, will provide a total of 2 trillion won in financial support this year to social solidarity economy organizations such as social enterprises, cooperatives, and village and self-support enterprises. This is part of efforts to strengthen inclusive finance for low-income and financially vulnerable groups.

The Financial Services Commission held the '1st Social Solidarity Finance Council of 2026' on May 8 at the Korea Inclusive Finance Agency in Jung-gu, Seoul, chaired by Executive Director Shin Jin-chang, to discuss these initiatives. At the meeting, the government, policy finance institutions, and mutual finance central associations reviewed the implementation results and achievements of measures to vitalize social solidarity finance and shared future plans.

To begin with, the Korea Inclusive Finance Agency will increase the annual supply of loans to social solidarity economy organizations through 'Smile Finance,' targeting vulnerable groups such as young people, from 6 billion won to 15 billion won. The Korea Credit Guarantee Fund will raise the dedicated preferential guarantee limits for social solidarity economy organizations by 200 million won each: to 700 million won for social enterprises and cooperatives, and to 500 million won for village and self-support enterprises. As a result, the guarantee supply will also be expanded from the current annual 250 billion won to 270 billion won this year, with a plan to reach 350 billion won by 2030.

Support from the mutual finance sector will also be strengthened. The National Credit Union Federation of Korea will expand financial support through its social economy support fund, which was established with 10 billion won. As of the end of last year, the Federation’s social economy support fund had provided interest support for loans totaling 220.2 billion won. The Financial Services Commission, in consultation with related ministries, plans to encourage other mutual finance institutions such as the National Agricultural Cooperative Federation to establish similar funds.

Amendments to the Credit Union Act are also being pursued. Currently, unlike other mutual finance institutions, individual credit unions do not have a legal basis to invest in other corporations for business purposes, which limits support for social solidarity economy organizations through equity investments. If the law is amended, individual credit unions will be able to provide such investment support.

The banking sector also plans to newly supply a total of 4.3 trillion won in funds to social solidarity economy organizations over the next three years, an 18.3% increase compared to the previous three years (2023-2025). In addition, the evaluation criteria for regional reinvestment by banks and savings banks will assign a higher score to the supply of social solidarity finance, and measures to expand social investment funds that specialize in investing in social solidarity economy organizations are being promoted.

Furthermore, efforts will be made to strengthen the information infrastructure supporting the supply of social solidarity finance. Currently, the Korea Credit Information Services database provides only basic information such as corporate registration numbers and organization names of social solidarity economy organizations. In the future, information such as regional data, social contribution, and employment rates of vulnerable groups will be added and made public on the website to enhance information accessibility.

Executive Director Shin Jin-chang stated, "Until now, financial companies have prioritized soundness and profitability, maintaining a uniform business approach centered on high credit and collateral, but now is the time for fundamental reflection and consideration. The essence of finance is to ensure the smooth flow of funds to where they are needed in society. Social solidarity finance, which pursues both profit and value, can offer a solution that is closer to the true essence of finance."

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