Expansion of Microfinance Supply by 300 Billion Won and More
The Office for Government Policy Coordination announced on the 11th that it will hold an interagency task force (TF) meeting to eradicate illegal private lending and implement comprehensive measures, including expanding advertisement bans and recovering criminal proceeds.
On this day, the government held its first TF meeting since the inauguration of the Lee Jaemyung administration at the Government Complex Seoul, presided over by Kim Yongsoo, the second deputy chief of the Office for Government Policy Coordination. The government has prepared a four-stage response plan based on the progression of illegal private lending damages: 'prevention and blocking of harm,' 'protection of victims when damage occurs,' 'recovery of criminal proceeds and reimbursement to victims,' and 'investigation and punishment of criminal organizations.'
First, to prevent low-credit, vulnerable groups from turning to illegal private lending, the government will expand the supply of policy and private-sector microfinance for ordinary citizens next year to 2.63 trillion won, an increase of 300 billion won from this year. The government will also swiftly block phone numbers and social networking service (SNS) accounts used for illegal private lending, and plans to expand the self-regulation system currently implemented by Kakao and LINE to other SNS platforms. Supervision of online loan brokerage sites will also be strengthened.
If damage occurs, the government will expand the system for appointing debtor representatives for victims and will require creditors to be notified in advance, either verbally or by text message. According to the Act on the Collection of Claims, once a debtor representative is appointed, creditors are prohibited from directly demanding repayment from debtors, including visiting them in person.
With the enforcement of the revised Lending Business Act, which invalidates illegal private lending contracts, the government will actively support lawsuits for invalidation and will also seek to revise the Act on the Confiscation of Corrupt Assets so that the state can confiscate criminal proceeds and return them to victims. For criminal organizations involved in illegal private lending, the police will lead intensive investigations, while the prosecution will raise its internal sentencing standards to ensure strict punishment.
The government stated, "Illegal private lending is a representative crime that threatens people's livelihoods, and eradicating it is a key prerequisite for achieving the Lee Jaemyung administration's national goal of 'a society where life and safety come first.' We will promptly implement detailed tasks, closely monitor the situation on the ground, and continue to identify additional institutional improvements as needed."
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