Banks to Increase Contributions to Public Policy Finance to 0.06%

Policy Financial Contributions from Banks to Increase
Legal Basis for "Sunshine Loan Youth" Interest Subsidy Clarified
Local Government Funds to Be Included in KIFA Business Accounts

Policy financial contributions from banks to support low-income and vulnerable groups will increase.

The Financial Services Commission announced on the 11th that the "Partial Amendment to the Enforcement Decree of the Act on Supporting the Financial Life of the People" containing this content was approved at the Cabinet meeting and will be enforced from the 21st.

According to the amendment, the common contribution rate of banks to the Korea Inclusive Finance Agency (KIFA) has been raised by 0.025 percentage points (p) from the current 0.035% to 0.06%. This follows the revision of the Inclusive Finance Act last September, which established a minimum common contribution rate of 0.06% for banks.

The amendment also clarified the legal basis for including the secondary interest subsidy project within KIFA's scope of work to promote the "Sunshine Loan Youth Secondary Interest Subsidy Project." As a result, socially disadvantaged youth using the Sunshine Loan Youth program can receive a low-interest loan at an annual rate of 2.0%, with 1.6% of the existing 3.6% interest rate subsidized.

Additionally, the amendment allows entrusted funds from local governments and others to be included as resources for KIFA's major business accounts, such as the Supplementary Inclusive Finance Account and the Self-Support Assistance Account.

The Financial Services Commission expects that this will enable various entrusted projects between local governments and KIFA.