Banks Supply 3.5 Trillion KRW in 'Saeheemang Holssi' Last Year... "Pursuing Extension of Operation Period"

This Year's Target: 4.2 Trillion KRW
70% of Users Are Wage Earners

#Mr. A, who ran a self-employed business, took out high-interest credit loans through private lenders due to the impact of COVID-19 and the economic downturn but eventually went out of business. Afterward, he found employment at a company and tried to refinance his existing high-interest credit loans through various financial institutions but was rejected due to a drop in credit rating caused by holding private loans. Since there were no delinquency records and earned income was verified, he was able to repay the high-interest credit loans with a Saehee Hope Loan. This also reduced the burden of principal and interest repayments.

Financial Supervisory Service Headquarters in Yeouido, Seoul. Provided by the Financial Supervisory Service

It has been revealed that the banking sector supplied 3.5 trillion KRW through its own low-income loan product, 'Saehee Hope Loan,' last year. The Financial Supervisory Service (FSS) plans to extend the operation period of Saehee Hope Loan, which expires this October.

On the 18th, the FSS announced that the banking sector's Saehee Hope Loan supply performance reached 3.5164 trillion KRW (184,000 people) last year, an increase of 175 billion KRW compared to the previous year.

Looking at the sales channels (based on new transactions), internet and mobile banking accounted for 40.1%, branches 39.7%, and loan recruitment platforms 20.2%, in that order.

The FSS stated, "The banking sector has made efforts to activate supply by expanding sales channels and easing interest rate burdens."

Most loan users were wage earners (69.6%) who borrowed mainly for living expenses (64.0%).

By age group, the distribution was 30s (27.1%), 20s and below (21.0%), 40s (19.5%), and 50s (17.3%). The proportion of those aged 60 and above also increased to 15.1% compared to the previous year.

The banking sector set this year's Saehee Hope Loan supply target at 4.2 trillion KRW, 100 billion KRW higher than last year's target.

The FSS said, "This year, Saehee Hope Loan will be excluded from each bank's household loan management performance and managed separately during household debt management," adding, "We will support the banking sector's active supply."

The FSS plans to push for an extension of the Saehee Hope Loan operation period.

The FSS stated, "We will consult with the banking sector to revise the Saehee Hope Loan operation regulations (Korea Federation of Banks model regulations) and promote the extension of the operation period."