The government plans to increase next year's budget for low-income financial support from 500 billion won to 1.6 trillion won, addressing gaps identified in the debt adjustment and policy finance processes. The initiative aims to reduce interest burdens for diligent borrowers and connect them with subsequent financial support and employment and welfare services.
On October 12, Park Hong-geun, Minister of the Ministry of Economy and Finance, visited the Central Integrated Support Center for Low-Income Finance in Jung-gu, Seoul, where he held discussions with officials from relevant ministries, public institutions, and private organizations to explore improvements to the low-income financial support system.
The 2027 budget proposal includes 1.6 trillion won for low-income financial support projects, a 239.8% increase from this year's 500 billion won. The government plans to expand initiatives that assist low-income and low-credit individuals in accessing formal financial services and support long-term delinquent borrowers in their recovery efforts.
Key initiatives include increasing the supply of the Sunshine Loan special program and youth loans from 2.63 trillion won to 2.78 trillion won. The government will allocate 527.4 billion won to provide loans to low-income individuals who struggle to access formal financial services. A new K-Living Support Loan, worth 600 billion won, will also be launched to address urgent funding needs for living expenses.
A special debt adjustment program targeting long-term delinquent loans for small businesses affected by COVID-19 will be implemented, amounting to 5.4 trillion won. This program will focus on unsecured long-term delinquent loans that became overdue before June 2023. Additionally, a youth opportunity fund of 450 billion won will be established to provide low-interest loans to unemployed youth, with interest waived during their job search period.
During the meeting, participants expressed concerns about the complexity of eligibility criteria and application processes, making it difficult for individuals to find suitable programs. They also noted a lack of connection between government policies that assist with employment and economic reintegration after debt adjustment.
Before the meeting, Minister Park inspected the on-site support for policy funding and debt adjustment consultations. The Central Integrated Support Center operates in collaboration with the Korea Financial Services Agency and the Credit Recovery Commission, providing integrated support for financial assistance, debt adjustment, and connections to employment and welfare services.
Minister Park stated, "We need to examine whether there are points where support is interrupted in the process of citizens using low-income financial products to regain independence during a period of rising interest rates. We will review the difficulties and improvement suggestions raised on-site with relevant ministries to address gaps in the system."
The Ministry of Economy and Finance plans to consider measures to reduce interest burdens for diligent borrowers, enhance connections to subsequent financial support, and strengthen recovery assistance after debt adjustment based on on-site feedback. Any additional budget requirements will be reviewed during the National Assembly's deliberation of the 2027 budget proposal.
* This article has been translated by AI.
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