Financial Commission Launches Korean Inclusive Finance Model

The Financial Commission announced on July 6 that it has officially commenced the design of a Korean model for inclusive finance with the first meeting of the supervisory committee for the Inclusive Finance Strategy Promotion Group.

Professor Kang Kyung-hoon of Dongguk University, who leads the private sector committee, pointed out that the current funding structure, which focuses on high-quality collateral and high-credit borrowers, fails to ensure financial access for innovative companies and vulnerable groups. He emphasized that "inclusive finance is not just about protecting socially disadvantaged individuals; it is a key growth strategy for maintaining the national innovation ecosystem."

Lee Kyu-bok, a senior researcher at the Financial Research Institute, noted that global banks define inclusive finance as a state where individuals and businesses can access and use financial products and services that meet their needs at reasonable costs. He stated that while South Korea's quantitative financial accessibility is among the best in the world, there is a need for qualitative improvement.

The supervisory committee consists of 12 private sector members, the director of the Financial Policy Bureau (secretary), and representatives from the Financial Supervisory Service. Experts from academia, research institutions, and consumer organizations will provide suggestions based on their areas of expertise.

Key discussion topics include: 1) Establishing the direction of inclusive finance (domestic and international trends, legislation, response to digital financial environments); 2) Internalizing governance (introduction of chief officers for inclusive finance, governance, internal controls); 3) Issues of financial company liability; and 4) Operating a subcommittee for asset formation (financial education for vulnerable groups, youth asset formation, lifecycle asset management).

In particular, the asset formation subcommittee plans to actively gather opinions from young people to ensure that the benefits of financial development do not disproportionately concentrate on certain groups, thereby widening the gap.

Participants agreed that South Korea should not only keep pace with international discussions but also take the lead in presenting a new discourse on inclusive finance.

The supervisory committee plans to meet once or twice a month to develop strategies and will sequentially present findings at inclusive finance transformation meetings.