A mid-rate loan product, so-called ‘Mezzanine Loan’, was launched by Seoul Guarantee Insurance(SGI) and 9 commercial banks on July 5. The loan is targeted for financial consumers with credit ratings from 4 to 7 who have been having difficulties to use bank loan products.
Income earners with annual income of KRW 20 million and above, and self-employed workers with annual earnings of greater than KRW 12 million can apply for the loan. Once granted, they will be able to borrow up to KRW 200 million at 6~10%.
For the past two weeks since its launch, 3,163 borrowers were granted Mezzanine Loan, total volume amounting to KRW 32.4 billion. It turned out that 77.8% of such loans were given out at 6~8% and KRW 10.2 million was lent to a borrower in average. It was also meaningful to find out that mid-income earners with KRW 20 to 40 million take up about 70% of Mezzanine Loan borrowers, whichmeets its initial purpose of helping mid to low income earners borrow needed money from banks.
The banks will continue selling Mezzanine Loan until the total volume reaches KRW 500 billion. Moreover, it is expected that four major regional banks will be allowed to sell the loan in the near future to reach out to wider rage of financial consumers.