"Just 1 Million Won..." 10 Billion Won Released in Small Livelihood Loans in 3 Weeks

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 Jinhyung Kang aymsdream@

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Small livelihood loans totaling about 10 billion KRW were disbursed in just three weeks. The small livelihood loan program provides up to 1 million KRW to eligible individuals with a credit score in the bottom 20% or lower (KCB 700 points, NICE 744 points) and an annual income of 35 million KRW or less.

According to the Financial Services Commission on the 22nd, a total of 15,739 financially vulnerable people were supported with small livelihood loans over the past 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 loan program planned to supply a total of 100 billion KRW, funded by 50 billion KRW in donations from the banking sector and 50 billion KRW from the Korea Asset Management Corporation (KAMCO). Considering the current application status, it is expected to be exhausted early before the end of the year.

Accordingly, the Financial Services Commission decided to secure an additional 64 billion KRW in funds. They encouraged the financial sector to donate the National Happiness Fund as a resource for small livelihood loans. This donation uses the excess recovery funds from the 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 supposed 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.

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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As of the 19th, the donation amount from 121 financial companies that expressed their intention to donate to the Korea Inclusive Finance Agency without receiving excess recovery funds was about 26.3 billion KRW. Additionally, if other financial companies currently reviewing donations positively confirm 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 amount of 26.3 billion KRW and the expected future donations of 37.7 billion KRW, a total of 64 billion KRW in funds will be secured," adding, "We will be able to continuously supply small livelihood loans without disruption 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, we will ensure that policy-based inclusive finance is stably supplied."

Meanwhile, small livelihood loan applications are accepted at 46 Korea Inclusive Finance Integrated Support Centers nationwide, where counseling is provided on debt adjustment, welfare linkage, employment support, dormant deposit recovery, and responses to illegal private loans.

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