Hana Bank Launches 100 Billion KRW Financial Support for Small Businesses
Woori Financial to Announce "Measures Aligned with Public Expectations" Soon
Less than a week after President Yoon Suk-yeol harshly criticized banks using strong terms such as ‘servitude,’ ‘gapjil’ (abuse of power), and ‘monopoly,’ Hana Bank announced a win-win finance plan that includes interest refunds and expanded financial support for low-income earners. Additional measures are expected to follow from other banks, including Woori Bank.
On the 3rd, Hana Bank announced a financial support plan worth 100 billion KRW targeting small business owners. Approximately 300,000 individual business customers will receive ▲interest cashback ▲expanded supply of low-income financial products ▲support for energy living expenses and communication fees ▲management consulting support.
First, starting next month, a 4 billion KRW ‘interest cashback’ program will be implemented. For about 2,500 customers who had deferred principal or interest payments due to difficulties caused by COVID-19, the bank will refund the interest paid in the previous month every month for six months. Additionally, for loans totaling about 150 billion KRW of customers whose ‘maturity extension and repayment deferral support measures’ ended in September, the bank will continue its own extension measures.
Along with this, a total of 66.5 billion KRW ‘interest cashback’ program will be provided to ▲self-employed customers (21,000 people, 21 billion KRW) ▲users of the medium-credit small business policy loan product ‘Hope Plus Guaranteed Loan’ (about 32,000 people, 11.5 billion KRW) ▲new loan customers with regional credit guarantee foundation guarantees (about 60,000 people, 30 billion KRW).
Support will also be provided for energy living expenses and communication fees. For financially vulnerable self-employed individuals selected by the bank, including users of low-income financial products and high-interest vulnerable borrowers, up to 200,000 KRW per person, totaling about 30 billion KRW, will be provided for energy living expenses. For newly affiliated small business customers, 50,000 KRW per person (about 2 billion KRW) will be provided for communication fees, and selected individual business loan customers will receive consulting fees of 500,000 KRW per person (about 1.5 billion KRW).
Woori Financial Group also announced that it will soon release a win-win finance plan targeting vulnerable groups such as small business owners, self-employed individuals, and youth. On the same day, Woori Financial Chairman Lim Jong-ryong held an emergency meeting attended by all subsidiary CEOs to review the current status of win-win finance initiatives and discuss expansion plans. Chairman Lim said, “In addition to fulfilling the previously announced win-win finance promises, we must find better measures that meet the public’s expectations and provide practical help as soon as possible.”
The win-win finance plan prepared by Woori Financial is expected to focus on improving existing products and alleviating the burdens of people suffering from interest rate hikes or delinquencies on existing loans. Woori Financial explained, “We have completed the basic design of a customized win-win finance package for vulnerable groups such as small business owners, self-employed individuals, and youth suffering from economic recession and high interest rates, and are refining the details.”
The announcement of additional measures from the banking sector came after President Yoon repeatedly addressed the repayment issues of loans for small business owners and the self-employed. On the 30th, at a Cabinet meeting, he said, “It feels like servitude to the bank when people work to death and have to give all their earnings to repay loan principal and interest,” and on the 1st, he stated, “Banks in our country often engage in gapjil. This is also a kind of monopoly.”
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