Debt Finance Industry, 62.4 Billion KRW Debt Relief for Financially Vulnerable Groups Last Year

134 Billion KRW Reduced for Accident and Deceased Debtors,
489 Billion KRW Reduced for Those with Income Loss or Unemployment

The Korea Microfinance Association announced on the 3rd that its member companies autonomously adjusted debts, reducing 62.4 billion KRW (59.8%) out of 104.3 billion KRW in principal and interest for 7,993 financially vulnerable debtors last year.

Among the debt amount of 14.6 billion KRW for 1,794 accident and deceased individuals, 13.4 billion KRW was reduced, and among 89.7 billion KRW for 6,199 debtors experiencing economic difficulties such as income reduction and unemployment, 48.9 billion KRW was reduced.

Since 2012, 53 microfinance companies including the Association, Leadcorp, Safe Loan, and Golden Capital Loan have participated in the autonomous debt adjustment program for financially vulnerable groups.

The autonomous debt adjustment is mainly operated through the 'Accident Debtor Debt Suspension and Reduction System' and the 'Deceased Debtor Debt Reduction System.'

The Accident Debtor Suspension and Reduction System is a rule that exempts interest and suspends debt collection during a minimum debt repayment suspension period of two months or more when a microfinance user delays debt repayment due to sudden accidents, illness, unemployment, etc.

The Deceased Debtor Debt Reduction System exempts part or all of the remaining debt when the debtor has passed away.

Jung Sung-woong, the Association’s chairman, said, "We will support more microfinance companies to participate in the autonomous debt adjustment jointly prepared by the industry," adding, "We will strive to supplement operational issues of the system to provide practical help to debtors."