Democratic Party Lawmakers Visit Seomin Geumyungwon... Will Haetsallon Budget Be Restored?

On the 24th, On-site Visit to the Seomin Geumyung Jinheungwon

Amid ongoing criticism over the drastically reduced budget for support of low-income financial services during last week's political turmoil surrounding the presidential impeachment, opposition lawmakers from the National Assembly's Political Affairs Committee are set to visit the Korea Inclusive Finance Agency under the Financial Services Commission to conduct an on-site inspection of policy loan programs for low-income earners.

According to Asia Economy's report on the 20th, lawmakers from the Political Affairs Committee, mainly from the Democratic Party, plan to visit the Korea Inclusive Finance Agency on the 24th to review the status of policy fund loans. There are concerns that if the supply of 'Hetsal Loan 15,' a representative low-income loan, decreases amid tightening institutional financial loans, the difficulties faced by low-credit and low-income individuals will worsen. The visit aims to assess the situation on the ground. Hetsal Loan 15, transferred from the National Happiness Fund to the Korea Inclusive Finance Agency in July this year, is a low-income financial product that supports the use of institutional finance by low-income and low-credit individuals.

On the 10th, the National Assembly passed next year's budget, which was reduced by 4.1 trillion won compared to the original government proposal, during a plenary session. At that time, as the ruling party refused to cooperate ahead of the first impeachment vote, the opposition unilaterally passed the budget, which excluded all budget increases related to Hetsal Loan 15 that had been agreed upon in the Political Affairs Committee.

Initially, the budget for next year related to the Korea Inclusive Finance Agency's operation of Hetsal Loan 15 was set at 90 billion won, the same as this year, but it was criticized for not considering the demand for guarantees. The budget was based on a guarantee supply of 650 billion won, the same scale as this year, but the guarantee supply for Hetsal Loan 15 has exceeded 1 trillion won annually since 2021.

In response, lawmakers from both ruling and opposition parties in the Political Affairs Committee had agreed to increase the budget from 90 billion won to 145 billion won, an increase of 55 billion won. This consensus was reached out of concern that if low-income financial services shrink amid an economic crisis compounded by high inflation, high interest rates, and domestic demand stagnation, low-income and low-credit individuals could be driven to illegal loan markets. However, the opposition unilaterally passed a budget in the plenary session that excluded the increased amount, nullifying the agreement. A Financial Services Commission official explained, "According to the approved budget, due to the Korea Inclusive Finance Agency's circumstances, including an increase in subrogation repayment rates and early depletion of fund resources, the supply target amount will inevitably decrease compared to this year."

The opposition lawmakers' visit to the Korea Inclusive Finance Agency is interpreted as a move by the National Assembly to prepare supplementary measures for low-income financial support through a supplementary budget following the impeachment political situation. A Political Affairs Committee official said, "Since both ruling and opposition parties agree on the need to expand low-income financial services, actively considering ways to supplement the budget through a supplementary budget is necessary." Financial Services Commission Chairman Kim Byung-hwan also promised during the Political Affairs Committee's inquiry on the 19th, "We will devise ways to supplement low-income financial services," adding, "We will work with fiscal authorities to ensure that demand is reflected in the supplementary budget."

Kim Eun-jung, Co-Director of the People's Solidarity for Participatory Democracy, criticized, "Processing the budget without considering all the partial agreements on increases made by each standing committee is a political act," and pointed out, "Since people's livelihoods are currently very difficult, ruling and opposition parties need to come together to expand the necessary budget through a supplementary budget."