Considering Korea’s fast-aging society, Financial Service Commission (FSC) Chairman Yim Jong-yong said he will strengthen the asset management function of all financial firms in the country.
In his speech at the 11th Financial Reform Meeting, Yim said the FSC will draw up strategies to strengthen the financial industry’s global competitive power by making each financial sector stronger to compete abroad.
The chairman also said he would not neglect keeping the financial market stable at all times and providing financial support to the average people, especially by strengthening the management of corporate and household debts against the changes in the financial environment, both at home and abroad. He will especially strengthen the monitoring of the financial market on the potential risk factors.
Financial Reform Committee Chairman Min Sang-ki said he will consult with related government ministries and experts on the means to expand the financial education at high schools and universities. A majority of the committee’s members also saw the need to provide financial education to retirees and subscribers of the national pension service so they know how to manage their funds.
On June 23, the FSC announced another f microfinance policy to strengthen low incomers’ financial stability. Chairman Yim Jong-yong convened a press briefing and explained the government’s detailed plan to support low income borrowers’ self sufficiency.
The FSC will expand the provision of policy loans to 5.7 trillion won per year, which is expected to increase the number of beneficiaries from the current 470,000 to 600,000 annually.
The government will provide more incentives for policy loan borrowers who faithfully repay their debt on time. Such incentives include enabling people to borrow up to 5 million won in emergency loans and issuing credit cards.
Furthermore, various microfinance products will be introduced tailored to borrowers’ needs. For instance, ceilings for housing guarantee loans and jeonsei loans will be increased. Starting from the latter half this year, tuition fee loans, insurance policies for the aged population, and special loans for the disabled will be newly introduced.
Low-income borrowers will be able to receive comprehensive consulting and services related not only to microfinance, but also job seeking and welfare. Moreover, the Microfinance Center will be launched to provide one-stop microfinance services.
A related bill has been submitted to the National Assembly and is awaiting approval. Starting no later than the second half of this year, low-income borrowers will be able to benefit from the government’s new microfinance policy measures. As the previous initiatives did, we expect the newly announced plan would significantly contribute in improving livelihoods of ordinary people.
The Park Geun-hye administration has been aiming to improve people’s livelihoods. Likewise, the FSC has devised and announced several policy measures to provide financial support, particularly for low-income earners.
For instance, the Happiness Fund, launched in March 2013, purchased delinquent loans of 2.8 million low-income borrowers to reduce their debt servicing burden and supported debt restructuring of total 410,000 borrowers as of last month. Four major government-backed microloans have also provided a total of 11 trillion won to more than 1.1 million low-income earners.
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