'Up to 1 Million Won for Urgent Funds' Small Livelihood Loans, Additional 64 Billion Won Planned

On the 27th, citizens visiting the Jung-gu Central Microfinance Integrated Support Center in Seoul applied for loans from a small living expense loan product offering up to 1 million won with an annual interest rate of up to 15.9%. Photo by Kang Jin-hyung aymsdream@

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Small livelihood loans were provided to a total of 15,739 financially vulnerable individuals over three weeks (March 27 to April 14). Among them, 11,900 people borrowed 500,000 KRW, and 3,839 people borrowed more than 500,000 KRW by providing proof of fund usage such as hospital bills. The average loan amount per person was about 610,000 KRW. The cumulative total support amount reached 9.64 billion KRW.

The small livelihood loans not only provide simple financial support but also contribute to ultimate self-sufficiency through comprehensive counseling on debt adjustment, welfare linkage, employment support, dormant deposit recovery, and responses to illegal private loans. Over the past three weeks, a total of 15,726 comprehensive counseling sessions were conducted at the Integrated Support Center for Low-Income Finance.

The small livelihood loan program planned to supply 100 billion KRW funded by 50 billion KRW in donations from the banking sector and 50 billion KRW from Korea Asset Management Corporation (KAMCO). Considering the current application status, it is expected that the prepared funds will be exhausted early before the end of the year.

The Financial Services Commission plans to secure an additional 64 billion KRW. The financial sector has expressed willingness to donate the National Happiness Fund as part of their social contribution to the small livelihood loan fund. This donation uses excess recovery funds from the past National Happiness Fund.

The excess recovery funds are the amounts recovered from non-performing loans purchased by the National Happiness Fund from financial companies, after deducting the purchase price and management costs. Originally, these funds were to be returned to the financial companies, but following parliamentary recommendations, since 2019, they have been reserved in the National Happiness Fund without distribution to each financial company.

As of the 19th, 121 financial companies that have not received excess recovery funds and have expressed their intention to donate to the Korea Inclusive Finance Agency have pledged about 26.3 billion KRW. Additionally, if other financial companies currently positively reviewing donations finalize their intentions, an additional donation of approximately 37.7 billion KRW is expected.

Yoo Jae-hoon, Director of the Financial Consumer Bureau at the Financial Services Commission, said, "Combining the confirmed donation of 26.3 billion KRW and the expected future donation of 37.7 billion KRW, a total of 64 billion KRW in funds will be secured," adding, "We will continue to supply small livelihood loans steadily until the end of the year." He also stated, "Next year, the financial sector has agreed to donate 50 billion KRW for small livelihood loan funds, and with support from budget authorities, policy-based low-income finance will be stably supplied."

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