Up to 10 million won at 3% annual interest for 10 years
Order to find out if loans are available for those with bad credit, etc.
Financial sector’s “question of loan collection at maturity” backlash
As the presidential election approaches, the wind of’political finance’ grows
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Lee Jae-myeong (pictured), the Gyeonggi Governor of Gyeonggi Province, who ranks first in the presidential election runners’ approval rating, ordered a commercial bank to make a’basic loan’ product, causing controversy. The intention is to lend up to 10 million won per person for 10 years, regardless of the credit rating of all citizens.
According to the banking note on the 5th, the Gyeonggi Credit Guarantee Foundation delivered a’Gyeonggi-do type basic loan pilot operation (draft)’ to each commercial bank at the end of last month. The core content is to consult with Gyeonggi-do on the opening of a financial product that lends 5 to 10 million won per person at an annual interest rate of 3% for 10 years, regardless of creditworthiness.
The targets are all Gyeonggi-do citizens, and first of all, a pilot operation is planned for Gyeonggi-do citizens aged 25-26 or married (males 33-34 years old, females 29-30 years old). There are two types of loans: repayment at maturity at the same time and negative passbook conditions. In the case of temporary repayment to maturity, the principal and interest are paid off at the same time without paying interest during the loan period. The total amount of support was set at 1 to 2 trillion won.
This is interpreted with the intention to provide a pilot service in Gyeonggi-do of the basic loans that Governor Lee has claimed so far. Gyeonggi Province proposed a 100% credit loan method and a Gyeonggi Shinbo issuing guarantees. Instead of the government, a private bank lends loans to low-credit people at low interest rates, and the government uses a secondary preservation system that compensates for the difference between the market interest rate and the policy interest rate, and the Gyeonggi Shinbo will be responsible for the difference in interest and unrepayable bad assets. In addition, commercial banks announced that they were asked whether △the product could be operated, △the expected interest rate when the product was operated, △the expected amount for secondary preservation, △whether it was possible to operate a product that pays interest at maturity at once, and △whether it is possible to extend the maturity for an additional 10 years.
Commercial banks responded that they were embarrassed. An official from Bank A who requested anonymity said, “Even if the Gyeonggi Shinbo offers 100% guarantee, it is said that interest is paid in arrears or deferred payments, which is beyond the existing common sense.” There is no option, and it is questionable whether the loan can be withdrawn when it expires.”
As the presidential election drew near, there were voices of concern about the politics’ breath. An official of B Bank protested, “If the implementation is carried out according to their intentions, they will take the results, and if the bank refuses, they will hold the bank accountable, but they are worried that a populist policy that does not take into account risks will continue.”
/ Reporter Kim Kwang-soo [email protected], Reporter Lee Tae-gyu [email protected]
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