Illegal Private Financing Prevention Loan Delinquency Rate Hits 44.3%... Rising Every Year

[Economy 365]

The delinquency rate for the illegal private financing prevention loan, a policy financial product designed for vulnerable groups, has surpassed 44%.

As of the end of September, the outstanding loan balance stood at 314 billion won, with the delinquent balance at 139.1 billion won, resulting in a delinquency rate of 44.3%.

The rate has been rising every year from 11.7% in 2023.

Delinquency rates were higher among younger age groups, recording 50.7% for those in their 20s or younger and 45.5% for those in their 30s.

The illegal private financing prevention loan is a product that lends up to 1 million won for living expenses and other needs to vulnerable groups who find it difficult to use mainstream financial services.

Starting next year, the government plans to overhaul the program into a tentative "K-People's Livelihood Support Loan," providing up to 1 million won at an annual interest rate of 4.5% to citizens in the bottom 50% of credit scores without income restrictions.

The Financial Services Commission stated that it will screen applicants through in-person consultations to ensure that high-income earners who have access to mainstream financial services are not supported.

*This article was produced with AI audio.
※ Please note: This article was translated by AI and may contain errors.