[2020 Financial Services Commission Work Plan] Reform of Policy-Based Microfinance Support System

[Asia Economy Reporter Kangwook Cho] The policy support system for sustainable low-income financial services will be fundamentally improved in terms of funding base, product design, and supply system.

According to the Financial Services Commission's '2020 Work Plan' announced on the 19th, policy low-income financial services amounting to about 7 trillion KRW annually will be supplied this year, including 800 billion KRW for Haetsal Loan 17, 2.2 trillion KRW for Worker Haetsal Loan, and 4 trillion KRW for Microfinance and New Hope Holssi. The average annual supply from 2016 to last year reached 6.7 trillion KRW.

To secure funding, the contribution scale from the Lottery Fund will be expanded from 175 billion KRW during 2016?2020 to 190 billion KRW during 2021?2025.

The scope of financial companies obligated to contribute will also be expanded from mutual finance and savings banks (about 150 billion KRW annually), which currently contribute temporarily, to banks, insurance companies, and specialized credit finance companies (about 200 billion KRW annually) that contribute regularly.

The scope of dormant financial asset contributions will be expanded to include investor deposits (inactive for over 10 years), and the online refund limit will be raised from 500,000 KRW to 10 million KRW.

Through market and financial companies' proactive product development, the development of demand-tailored low-income financial products will be promoted. Examples include livelihood funds for farmers, fishermen, and foresters from mutual finance, and small credit cards exclusively for low-credit users from card companies.

To enable the general public to conveniently use policy low-income financial services, innovative financial services such as financial asset management and loan brokerage apps will be linked with the tailored loan services of the Low-Income Finance Promotion Agency.