Debt Relief, Claim Write-Offs, and Expanded Rehabilitation Finance
The Korea Technology Finance Corporation announced on October 22 that it will implement the "Enhanced Support Plan for the Rehabilitation of Diligent Debtors" to promote credit recovery and rehabilitation support for financially vulnerable groups. This plan has been prepared to align with the new government's policy of strengthening inclusive finance, aiming to alleviate the debt burden of financially vulnerable groups such as small business owners and self-employed individuals, and to provide institutional support for the swift credit recovery of diligent debtors who are making repayments.
The main measures include: ▲ expanding the eligibility for the New Start Fund and strengthening debt relief benefits for vulnerable groups; ▲ resolving long-term and small-amount debts and providing customized debt adjustment through the New Leap Fund; ▲ increasing the write-off of uncollectible claims such as those with expired statutes of limitations; ▲ expanding incentives for diligent debtors; and ▲ promoting financial support for companies with excellent technology that are making a second attempt in business.
In particular, the Korea Technology Finance Corporation plans to support debt adjustment for small business owners and long-term or small-amount delinquent borrowers through the New Start Fund and the New Leap Fund, and will write off more than 700 billion won worth of uncollectible claims within this year-the largest amount ever-to help normalize financial transactions for debtors who have suffered disadvantages due to past delinquency records.
Additionally, the corporation will raise the principal reduction rate for debtors who are diligently repaying their debts in installments and will ease approval authority requirements for companies with excellent technology that are making a second attempt in business, thereby promoting rehabilitation support that can be tangibly felt in the field.
Kim Joungho, Chairman of the Korea Technology Finance Corporation, stated, "Through this plan, we have established an institutional foundation to help debtors with the will to repay get back on their feet," and added, "As a policy financial institution, the Korea Technology Finance Corporation will continue to do its utmost to support the swift recovery and renewed growth of financially vulnerable groups and to realize inclusive finance."
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