The financial authorities are set to introduce a "Comprehensive Inclusive Finance Evaluation System" to measure the efforts of financial institutions toward inclusive finance.
The initiative aims to encourage voluntary participation in inclusive finance through an evaluation system, following criticism that financial companies have been restricting the supply of funds to mid-to-low credit borrowers due to concerns over costs and asset soundness.
The Financial Services Commission (FSC) announced today (June 29) that it held the "Kick-off Meeting of the Policy Subcommittee for Low-Income Households under the Inclusive Finance Strategy Promotion Group" at the Government Complex in Seoul, where it discussed the direction for introducing the evaluation system and the operational plan for the subcommittee.
Currently, the FSC is reviewing the framework of the evaluation system, proposed indicators, and ways to utilize the evaluation results.
The Policy Subcommittee for Low-Income Households, which launched today within the Inclusive Finance Strategy Promotion Group, will be divided into four sub-units starting in July based on the characteristics of each task: supply of funds, support for economic recovery, management of overdue debt, and response to illegal private lending.
The meeting was attended by private subcommittee chair Dr. Im Soo-kang, other private committee members, and representatives from the Financial Supervisory Service, Korea Inclusive Finance Agency, Credit Counseling & Recovery Service, Korea Credit Information Services, and Korea Asset Management Corporation (KAMCO).
The "Supply of Funds Sub-unit" aims to design a "credit build-up" path, centered on the inclusive finance evaluation system and the introduction of a fund for the stabilization of low-income household finance, to make it easier for vulnerable groups to access institutional finance.
The "Support for Economic Recovery Sub-unit" will support debtors' return to economic activity by improving the systems of the Credit Counseling & Recovery Service and increasing the effectiveness of integrated support linkages, while the "Management of Overdue Debt Sub-unit" will be responsible for inspecting and regulating the overdue debt processes of public institutions and financial companies.
The "Response to Illegal Private Lending Sub-unit" plans to establish a one-stop consultation and relief system for illegal private lending, starting with preventive measures such as regulating illegal advertisements.
The FSC stated, "Once a concrete final plan is prepared, the Policy Subcommittee for Low-Income Households will finalize the proposal at monthly plenary meetings," adding, "We plan to announce this through a future grand transformation meeting."