Gyeonggi Province announced on October 27 that it will scrap the "Ultra-Low Credit Loan 2.0" program, which was implemented during former Governor Kim Dong-yeon's term, starting next year.

The Ultra-Low Credit Loan 2.0 program provides loans ranging from 500,000 won to 2 million won to provincial residents aged 19 or older with low credit scores (bottom 10% or lower) at a low annual interest rate of 1% with a maximum maturity of 10 years.

The ultra-low credit loan introduced by then-Gyeonggi Governor Lee Jae-myung in 2020 was a program that provided loans of up to 3 million won with a maturity of 5 years and a low annual interest rate of 1% to low-credit provincial residents who needed living funds but had difficulty using mainstream financial institutions due to low credit ratings.

It was operated for three years from 2020 to 2022.

The Ultra-Low Credit Loan 2.0 reduced the loan amount by 1 million won to 2 million won compared to the previous program, doubled the repayment period to 10 years, and was resumed early this year during Governor Kim Dong-yeon's term in office.

Gyeonggi Province allocated 3 billion won in this year's main budget for the program and accepted applications twice, in February and May.

Both application periods drew strong responses, closing within 20 to 30 minutes of opening.

However, controversy arose as members of the People Power Party in the provincial assembly raised criticisms, arguing that operational costs were excessive and that resolving financial difficulties should take priority.

An official from Gyeonggi Province said, "Amid ongoing financial difficulties, the central government is scheduled to run a similar program next year, so we decided to wrap up the Ultra-Low Credit Loan 2.0 program." The official added, "We estimate that about 43 billion won will be repaid through 2032, and we plan to redirect these repayments into the general account to invest in other fiscal projects."

The K-People's Livelihood Guard Loan, scheduled to be launched next January by the Korea Inclusive Finance Agency under the Financial Services Commission, will provide loans of up to 1 million won to those in the bottom 50% or lower of credit scores, with a 10-year maturity and an annual interest rate of 4.5%.


(Photo provided by Gyeonggi Provincial Government, Yonhap News)