[Issue Interview] Park Hongmin, Finda CEO: "Korea Leads in Loan Refinancing... Responding to Real Estate Loan Regulations with Portfolio Diversification"

Following DSR Calculator 2.0, Asset Management System '503020' to Launch in Q4
Reduced Total Loan Limit Increases Burden... "Overcoming Through Portfolio Diversification"
Intense Competition Among Refinancing Platforms in Korea... Responding with Advanced AI

"South Korea is an advanced country when it comes to loan refinancing (switching loans). However, while the country is advanced in terms of 'comparison' for refinancing, there is still a long way to go before we can provide consumers with the loans they truly need, anytime and anywhere, in a timely manner. Therefore, I would rate Finda's performance at 70 out of 100."

Park Hongmin, co-CEO who founded the fintech (finance + technology) company Finda in 2015, gave this answer during an interview at the Textile Center in Gangnam-gu, Seoul, on July 9, when asked by a reporter to grade the company's management over the past 10 years.

DSR Calculator 2.0 Gains Popularity... Fivefold Increase in Users in One Month

Park Hongmin, co-CEO of Finda, is being interviewed at the Finda office in Gangnam-gu, Seoul on the 9th. Photo by Kang Jinhyung

Finda attracted attention from the financial sector by launching DSR Calculator 2.0 after the government strengthened regulations this month by implementing the third stage of the stress-based Debt Service Ratio (DSR).

Finda has developed 12 calculators, including the DSR calculator, to recommend loan products tailored to consumers' income levels and credit scores. On June 5, Finda updated its DSR Calculator to version 2.0. Since then, the number of users has increased fivefold in just one month, and the number of limit inquiries has doubled.

Using the DSR calculator allows consumers to effectively respond to the government's real estate finance regulations. The calculator not only shows what percentage DSR applies, but also explains how much and what types of loans consumers can receive.

Park said, "Consumers are not interested in what percentage DSR applies to them, but rather in how much they can actually borrow," adding, "Using Finda's calculator can help reduce confusion."

50% Reduction in Total Loan Limit... Platforms Also Face Challenges

Park Hongmin, co-CEO of Finda, is posing ahead of an interview at the Finda office in Gangnam-gu, Seoul, on the 9th. Photo by Kang Jinhyung

The Financial Supervisory Service recently requested that banks and secondary financial institutions resubmit their household loan plans, reducing the total amount by 50% compared to previous levels, in accordance with the so-called '6·27 Regulation.'

When the overall loan limit is reduced, it becomes more difficult for loan comparison platforms to operate. This is because banks become less active in selling loan products, causing the 'products to sell' to disappear.

Park acknowledged that Finda is also facing difficulties due to the total loan limit regulation, and said that other fintech companies are likely experiencing the same. He emphasized that Finda will respond to this crisis by leveraging a diverse portfolio, including DSR Calculator 2.0.

For example, on January 17, Finda plans to launch '50·30·20,' which was designated as an innovative financial service by the Financial Services Commission. This system uses Finda's proprietary generative AI to guide users to allocate their assets in a 5:3:2 ratio.

The idea is to help users develop a habit of spending 50% on essentials, 30% on desired purchases, and 20% on loan repayment and investment. The 50:30:20 rule is the most common spending distribution method among consumers in advanced financial markets such as the United States and the United Kingdom.

Park said, "Reducing the total loan limit is like a store owner having fewer products to sell, which has a significant impact on management," but added, "After the launch of 50·30·20, we will drive innovation in consumer user experience (UX) and respond by creating synergy with our existing loan brokerage business."

Government Signals Possible Inclusion of Sole Proprietors in Refinancing... "Welcome"

Empty stores line a commercial area in Sinchon, Seoul. Photo by Jo Yongjun

Park said he "welcomes" the government's suggestion that refinancing could be expanded to include sole proprietors and self-employed individuals.

Previously, on June 19, the Financial Services Commission reported to the National Policy Planning Committee that it is considering including sole proprietors as eligible for refinancing as early as October (Q4).

According to the Financial Services Commission, as of the end of October last year, about 290,000 people had switched loans, amounting to approximately 16 trillion won. By switching to loans with an average interest rate 1.53 percentage points lower, each person saved about 1.76 million won in annual interest.

To provide more than just loan condition guidance to self-employed individuals, Finda acquired 100% of 'OpenUp,' the largest AI-based commercial district analysis service in Korea, in 2022. Within four months of its launch, the service was made free of charge, gaining strong support from small business owners.

OpenUp has made approximately 15 million commercial district analysis data points available for free, analyzing 700,000 commercial districts nationwide using AI. The website has accumulated around 300,000 registered users. The platform provides analysis reports based on AI, helping users estimate expected sales by business type within each district.

Park said, "There is strong demand for refinancing among sole proprietors, so it is positive that the government is providing the necessary infrastructure," adding, "Including sole proprietors as well as office workers will create a more complete refinancing ecosystem."

Finda is a compound word combining 'Finance' and the Korean character 'Da,' meaning 'many.' It also carries the metaphor 'life blooms.' Park emphasized that since the company's founding, he has maintained the management philosophy of 'eliminating cash concerns for everyone who uses Finda's services.'

Park said, "Finda started as a loan comparison platform for office workers, but through the acquisition of OpenUp and other initiatives, we have also supported sole proprietors," adding, "Our management goal of expanding into loans, asset management, and other areas to create a life without cash concerns has remained unchanged since the first day of founding."