Choisangdae, 2nd Vice Minister of Ministry of Economy and Finance, Holds '2nd Vice Ministers' Meeting on Fiscal Execution'
[Asia Economy Sejong=Reporter Kwon Haeyoung] The government has decided to execute a total of 68.3 trillion won in policy finance this year targeting vulnerable groups such as low-income earners, youth, and low-credit individuals, including 30 trillion won in support for 'COVID debt' relief for self-employed and small business owners.
Choi Sang-dae, the 2nd Vice Minister of the Ministry of Economy and Finance, held the '2nd Vice Ministerial Meeting on Fiscal Execution' on the 15th at the Seoul Jungbu branch of the Korea Housing Finance Corporation to review the execution status and future plans of the 2 trillion won financial support budget for vulnerable groups.
As part of the follow-up measures to the '125 trillion won + α' scale financial sector livelihood stabilization plan announced at the emergency economic livelihood meeting chaired by President Yoon Seok-yeol the previous day, the government decided to provide up to 68.3 trillion won in policy finance this year. Considering inflationary pressures, the focus will be on adjusting existing debt rather than providing new funds. Accordingly, 4.6 trillion won will be allocated for new fund provision, and 63.7 trillion won for existing debt adjustment.
First, up to 43 trillion won in policy finance will be supplied to small business owners. Of this, up to 30 trillion won will be invested in debt adjustment. Through this, the principal of loans for self-employed and small business owners affected by the COVID-19 crisis will be reduced by 60-90%.
For low-credit small business owners, 8.7 trillion won will be provided for low-interest refinancing loans, and 4.3 trillion won for new guarantees. Additionally, a low-interest refinancing guarantee project worth 8.5 trillion won targeting small business owners affected by COVID is currently preparing legal grounds with the goal of implementation in September.
For vulnerable groups such as youth and low-income earners, a total of 25.3 trillion won in policy finance will be supplied. To ease repayment burdens on low-income borrowers, 25 trillion won will be invested in the Safe Conversion Loan project, which converts variable-rate mortgage loans into long-term, low-interest fixed-rate policy mortgages. The target is homeowners with a house price of 400 million won or less and a combined household income of 70 million won or less, with a loan limit of up to 250 million won. The loan will be offered at an interest rate 30 basis points lower than the current Bogeumjari Loan rate at the time of borrowing. Furthermore, the Sunshine Loan Youth program for university students and unemployed youth is being expanded to 100 billion won and is currently in operation, and a temporary special guarantee project for low-credit individuals will be implemented in October with a supply scale of 200 billion won.
At the meeting, Vice Minister Choi also reviewed the execution plans and implementation status of livelihood stabilization measures to alleviate the burden of high inflation. A total of 447.1 billion won has been invested in 23 projects including strengthening support for vulnerable groups, reducing the burden of staple food costs for low-income households, and easing living expenses. The government plans to promptly execute projects reflecting increased support rates and expanded target groups.
Vice Minister Choi stated, "The current inflation situation is very severe, with high inflation expected to continue for some time, and there are concerns that additional base rate hikes may exacerbate management and livelihood difficulties for financially vulnerable groups such as small business owners and low-income earners. Fiscal execution management in the second half of the year will focus on price and livelihood stabilization, with concentrated inspection and management of livelihood support projects prepared since the new government took office."
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