KB Financial Group has announced a comprehensive plan to invest a total of 17 trillion won (approximately $13 billion) in inclusive finance over the next five years. The initiative aims to establish a robust support system that goes beyond mere financial assistance, allocating 10.5 trillion won specifically for low-income and vulnerable populations, encompassing everything from debt restructuring to asset formation support.
According to the financial sector on June 18, KB Financial plans to implement this inclusive finance strategy from 2025 to 2030, starting with an investment of 2.9 trillion won this year. The investment will gradually increase to 3.2 trillion won in 2027, 3.4 trillion won in 2028, 3.4 trillion won in 2029, and 3.5 trillion won in 2030.
This plan is notable for its targeted approach, with financial support tailored to specific groups. Of the total 17 trillion won, 10.5 trillion won will be directed towards supporting low-income and vulnerable groups, while the remaining 6.5 trillion won will assist small businesses and self-employed individuals. The focus is on reducing financial blind spots rather than merely expanding loan availability.
Key programs include debt relief for vulnerable borrowers and support for their recovery. The initiative will involve reducing principal amounts for short- and medium-term overdue debts and writing off long-term overdue debts, thereby facilitating credit recovery and re-entry into the formal financial system.
Eligible borrowers for debt relief include those with loans that have been overdue for more than five years and have principal amounts under 50 million won, as well as individuals covered under the Personal Debt Adjustment Act. The program is designed to allow for principal reductions of up to 90% after a review process.
KB Financial expects to resolve approximately 278.5 billion won in debts for about 12,000 individuals this year. The bank aims to support a return to normal economic activities through timely debt forgiveness and restructuring, rather than simply extending the statute of limitations on overdue debts.
A refinancing program has also been established to alleviate the financial burden on existing credit loan users. By refinancing existing credit loans into the New Hope Seed long-term installment repayment loans, borrowers will receive support to repay principal amounts at interest rates exceeding 7%. A youth-specific version of the New Hope Seed product will also be launched, featuring higher limits and lower rates.
Interest relief policies are also in place. KB Kookmin Bank has reduced the maximum interest rates on its New Hope Seed and credit loan debt adjustment products from 13.0% to 9.5%, a decrease of 3.5 percentage points. This change affects approximately 5,100 borrowers, with a total loan amount of 360 billion won.
Through the four credit loan debt adjustment products, around 4,000 financial consumers are expected to benefit from direct interest reductions annually. These products have been recognized as exemplary cases in the Financial Supervisory Service's 'Coexistence and Cooperation Financial New Products' initiative. In March of this year, the interest rate for new loans under 'KB New Hope Seed II' was also reduced by one percentage point. Customers who consistently repay their loans may receive additional interest rate reductions of up to 2.0 percentage points over the loan term, with automatic reductions of 0.2 percentage points for every six months of on-time payments.
KB Financial is also investing in new coexistence programs, such as cashback on mortgage loan interest and a financial support package for livelihoods, aiming to establish a sustainable inclusive finance system that goes beyond one-time assistance.
Yang Jong-hee, Chairman of KB Financial, stated, "Finance must become a force that creates social value. KB will continue to promote inclusive finance to illuminate the spark of new hope for more people."
* This article has been translated by AI.
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