FSC Chairman Yim Jong-yong met with financial companies on April 4 to check preparation of the launch of new mid-interest rate loans. Another 1 trillion won worth of mid-interest rate loans will be provided by mutual financial companies at a rate below 10% starting from June 13.
The mid-interest rate loan was first launched in July 2016 and sold by commercial banks. Range of the loan providers was expanded to savings banks in September and the total volume of the provided loan accounted for 550 billion won as of March 31, 2017.
This time’s decision to expand the volume of the loan was made based on the fact that the loan has greatly contributed in making it easier for those with relatively low credit rating to borrow money, giving them a second chance to stand on their own feet economically. Moreover, the loan is evaluated to have added more diversity to our financial market since it targets niche interest rate market – between that offered by commercial banks and non-banking companies.
At the meeting, Seoul Guarantee Insurance and four mutual fiance federations signed an agreement to newly provide the mid-interest loan starting from July.