[Asia Economy Reporter Kwangho Lee] To secure funds for low-income financial services, all financial institutions handling household loans will be subject to a contribution rate of 0.03% on the amount of household loans handled.
The Financial Services Commission announced on the 29th that it held the 17th regular meeting and approved the "Amendment to the Regulations on Supporting the Financial Life of Low-Income People," which includes this content.
The Low-Income Financial Act expands the scope of financial institutions subject to contribution fees, which serve as credit guarantee funds for the Korea Inclusive Finance Agency, from the current mutual finance cooperatives and savings banks to all financial institutions handling household loans, including banks, insurance companies, and specialized credit finance companies. Through this, it plans to secure about 200 billion KRW annually in contributions.
However, loans subject to contribution fees under other laws, as well as policy support products such as Worker’s Sunshine Loan, Sunshine Loan Youth, Korea Inclusive Finance Agency guaranteed loans, mid-interest rate loans, and New Hope Seed Loans, are excluded from the contribution target.
The contribution rate will be applied differentially (0.5% to 1.5%) according to the financial institution’s previous year’s subrogation payment rate.
Additionally, the types and scope of administrative information that the Korea Inclusive Finance Agency and the Credit Recovery Committee can request from government agencies have been specified.
The amended Regulations on Supporting the Financial Life of Low-Income People will take effect from the 9th of next month after promulgation and notification.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
