NongHyup Bank Leads with 114.2 Billion as of March
Authorities Demand Expansion of Financial Services for Low-Income Groups
Banks Increase Supply and Lower Interest Rates
Amid ongoing pressure from financial authorities to expand win-win financing, NH Nonghyup Bank has emerged as the bank with the highest volume of Saehee Hope Loan disbursements this year, a representative financial product for low-income households. The Saehee Hope Loan is a product that applies separate screening criteria to allow vulnerable borrowers with low income or low credit ratings to obtain loans from first-tier financial institutions.
According to the banking sector on the 30th, as of the 28th of this month, Nonghyup Bank's Saehee Hope Loan supply amounted to 114.2 billion KRW, the highest among the five major commercial banks. The achievement rate of this year's target (tentative) also led at 21.9%. Banks set their own Saehee Hope Loan supply targets each year according to their circumstances.
Hana Bank has supplied a total of 87.3 billion KRW from January this year to date, with an achievement rate of 13.6%. As of the end of last month, KB Kookmin Bank, Shinhan Bank, and Woori Bank supplied 55.3 billion KRW, 43.1 billion KRW, and 37.5 billion KRW respectively.
The Saehee Hope Loan targets those with an annual income of 35 million KRW or less, or those in the bottom 20% of personal credit scores with an annual income of 45 million KRW or less, with a maximum loan limit of 35 million KRW.
The supply of Saehee Hope Loans is expected to increase this year. Last month, the banking sector decided to add 6 trillion KRW to the initial supply target of 64 trillion KRW, raising the total supply target to 70 trillion KRW. This appears to be influenced by financial authorities' calls for expansion amid a recent downward trend in banks' annual Saehee Hope Loan performance over the past few years.
Individual banks are also making efforts. Shinhan Bank lowered its new loan interest rate by 1.5 percentage points and provides insurance coverage to repay loans up to 35 million KRW for borrowers who face unexpected accidents that make loan repayment difficult. Nonghyup Bank expanded preferential interest rates by 0.5 percentage points, selected and awarded outstanding employees and branches, and introduced mobile loans since June last year to enhance convenience. Hana Bank reduced interest rates by 1 percentage point. Kookmin Bank increased motivation by expanding customer promotions and employee training and separately launched the ‘KB Kookmin Hope Loan,’ a product that converts second-tier financial loans to help low-credit vulnerable borrowers enter the banking sector. Busan Bank and Gyeongnam Bank also lowered interest rates by 1 percentage point each.
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