Financial Companies' Contributions to KIFA to Increase by 197.3 Billion Won... Amendment to Inclusive Finance Act Enforcement Decree Announced

Legal Basis Established for KIFA to Provide Credit Guarantees
to Users of Small Loans from CCRS

The Financial Services Commission announced on December 19 that it will conduct a legislative notice for the amendment to the Enforcement Decree of the Act on the Support for Financial Life of Ordinary People, as a follow-up measure to the President's work report.

Through this amendment, the government aims to increase the amount of contributions that financial companies make to the Korea Inclusive Finance Agency (KIFA), thereby securing the necessary resources for the stable supply of policy-based inclusive finance and interest rate reductions. The amendment also seeks to establish a legal basis for KIFA to provide credit guarantees to users of small loans from the Credit Counseling & Recovery Service (CCRS).

First, the annual contribution amount that financial companies pay to KIFA will be expanded. Under current regulations, the annual contribution from financial companies to KIFA is expected to total 434.8 billion won (247.3 billion won from banks and 187.5 billion won from non-bank financial institutions). Banks are subject to a common contribution rate of 0.06% of their household loan balances, while insurance, mutual finance, specialized credit finance, and savings banks are subject to a common contribution rate of 0.045% (which will be reduced to 0.03% from 2026) of their household loan balances.

Due to high interest rates and inflation, the need for policy-based inclusive finance support is increasing. In order to ensure the stable supply of policy-based inclusive finance and to lower interest rates, additional funding is required. The National Assembly has also approved an increase in the 2026 budget for the special guarantee program of the inclusive finance product "Sunshine Loan," and has called for a prompt amendment to the Enforcement Decree of the Inclusive Finance Act to expand financial sector contributions.

Accordingly, the common contribution rate for banks will be raised to 0.1% (an increase of 0.04 percentage points), while the rate for insurance, mutual finance, specialized credit finance, and savings banks will be frozen at 0.045%. For banks, the maximum contribution rate of 0.1% stipulated by the Inclusive Finance Act will be imposed, taking into account their status in the financial sector and the need to fulfill social responsibilities. For non-bank financial institutions, the current rate of 0.045% will be maintained in light of their continued poor business performance.

As a result of this amendment, the annual contribution from financial companies to KIFA is expected to increase by 197.3 billion won (134.5 billion won from banks and 62.8 billion won from non-bank financial institutions), reaching a total of 632.1 billion won (381.8 billion won from banks and 250.3 billion won from non-bank financial institutions). The ratio of banks' contributions to KIFA to their net income (excluding Korea Development Bank and Export-Import Bank of Korea) is expected to rise from 0.7% in 2024 to 1.6%.

The amendment will also provide a legal basis for KIFA to offer credit guarantees to users of small loans from CCRS. Currently, CCRS not only supports debt adjustment programs but also operates a small loan program that provides living stabilization funds at low interest rates of 3-4% per year to those who are implementing debt adjustment. Under existing regulations, KIFA's credit guarantees are limited to debts owed to financial companies. As a result, CCRS has been operating its small loan program through insurance from Seoul Guarantee Insurance rather than KIFA's guarantees. Due to the need for Seoul Guarantee Insurance to manage its soundness, it has been difficult to expand the supply of CCRS's small loan program.

Under the amendment, monetary debts owed by individuals to CCRS will be added to the scope of KIFA's credit guarantees, thereby establishing a legal basis for KIFA to provide credit guarantees to debtors implementing debt adjustment who use CCRS's small loan program. Based on KIFA's credit guarantees, CCRS plans to expand the annual supply of its small loan program by 300 billion won (from 120 billion won per year to 420 billion won per year) and to include individuals implementing debt adjustment directly with financial companies as eligible recipients.

The legislative notice for the amendment to the Enforcement Decree of the Inclusive Finance Act will be conducted from December 24, 2025, to February 2, 2026. After review by the Ministry of Government Legislation and resolutions by the Vice Ministers' Meeting and the Cabinet Meeting, the amendment is expected to take effect in the first half of 2026.