Establishment of Expanded and Improved Self-Debt Adjustment Program
Expansion of Eligibility and Diversification of Support Methods for Household 'Credit Loan 119 Program'
Part of Shinhan Financial Group's Shinhan Donghaeng Project to Support Vulnerable Groups
[Asia Economy Reporter Song Hwajeong] Shinhan Bank announced on the 4th that starting from the 7th, it will establish a comprehensive corporate debt adjustment program for vulnerable corporate borrowers and expand the Credit Loan 119 program for vulnerable household borrowers to provide targeted support for borrowers who can be normalized.
Shinhan Bank prepared this measure separately from the existing joint maturity extension and repayment deferral program of the banking sector, as the number of vulnerable borrowers requiring debt adjustment and financial support has increased recently due to rapid interest rate hikes and economic downturn.
This program is part of the Shinhan Together Project, which supports vulnerable groups within Shinhan Financial Group. First, to provide thorough support for vulnerable corporate borrowers who can be normalized, the bank will establish the 'Comprehensive Corporate Debt Adjustment Program,' an expanded in-house corporate debt adjustment system with broader eligibility and support.
The Comprehensive Corporate Debt Adjustment Program targets ▲companies affected by COVID-19 such as those receiving government disaster relief funds or compensation payments related to COVID-19, and companies benefiting from COVID-19 financial support ▲companies with delinquency history ▲companies with lower corporate credit ratings. It offers customized debt repayment programs for small and medium-sized enterprises and small business customers, including long-term installment refinancing (up to 20 years), principal repayment deferral (up to 2 years), interest deferral (up to 2 years), interest rate reduction, and expert consulting. Existing programs such as the SME Healing Program and Corporate Success Program will also be revitalized to strengthen support for vulnerable corporate borrowers.
In the household loan sector, the existing 'Credit Loan 119 Program' will be expanded and improved. The Credit Loan 119 Program is a joint banking sector program led by the Financial Services Commission that proactively supports debt adjustment for individual customers who face difficulties in normal credit transactions due to economic changes such as unemployment, business closure, or income reduction. Support is provided according to each customer's repayment ability through methods such as ▲maturity extension ▲repayment condition modification ▲interest rate reduction. Shinhan Bank will expand the eligibility for the Credit Loan 119 Program by broadening the scope of multiple debtors and maturity extension targets, and diversify support methods by introducing a system that allows extension of the same amount without partial repayment at maturity and long-term installment repayment within a maximum of 10 years.
The bank also plans to strengthen the guidance process for eligible recipients to ensure that many customers can benefit.
A Shinhan Bank official said, "We have prepared targeted support to ensure a soft landing for individuals, small business owners, and SMEs who are temporarily struggling with debt repayment due to recent economic deterioration and interest rate hikes. We will continue to improve and activate support measures to fulfill the bank’s social responsibility to the best of our ability."
The joint banking sector support system for vulnerable borrowers includes the Credit Loan 119 Program, mortgage pre-workout program, principal repayment deferral system for individuals, and the 119 Program for individual business owners. Shinhan Bank operates its own corporate support programs such as the SME Healing Program and Corporate Success Program (CSP).
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