Gyeonggi Province Offers Loans to Illegal Finance Victims at 1% Annual Interest, Up to 3 Million Won

[Suwon Ilbo=Reporter Park No-hun] Gyeonggi Province is implementing a new program offering loans to low-credit individuals harmed by illegal finance operations, with an annual interest rate of 1% and loan amounts up to 3 million won.

The province announced on the 25th that it will begin accepting second-round applications for the 'Gyeonggi Extremely Low Credit Loan' starting July 15.

The 'Gyeonggi Extremely Low Credit Loan' is a program that provides 500,000 won in non-examination loans to residents with a credit rating grade 7 or below at 1% annual interest with a 5-year maturity. With further examination, loans of up to 3 million won are possible. Gyeonggi Province is implementing this project with 50 billion won in budget to overcome the COVID-19 crisis.

The second-round applications include a newly established 'Illegal Finance Victim Loan' program, in addition to the existing non-examination and examination loan categories.

Low-credit individuals who have difficulty obtaining loans from regulated financial institutions often resort to illegal finance operations for small amounts, which can lead to damages from high interest rates and illegal debt collection practices. The province established the 'Illegal Finance Victim Loan' program to prevent damages from illegal finance usage and to eradicate illegal lending operators, according to the project's stated purpose.

The newly established 'Illegal Finance Victim Loan' targets residents of Gyeonggi Province with a credit rating grade 7 or below who were harmed by illegal finance operations prior to July 1 this year. If victims have reported the damage to the Financial Supervisory Service's illegal finance reporting center or police departments, loans of up to 3 million won per person will be provided according to the scale of damage. Additionally, the province will take measures such as requesting investigations from the Gyeonggi Province Special Judicial Police Unit and the prosecution against predatory illegal lenders.

The eligibility requirements for the 'Gyeonggi Extremely Low Credit Loan' remain the same as before: residents must have resided in Gyeonggi Province from July 1 to the date of application, have a credit rating (based on NICE credit information) of grade 7 or below, and be at least 19 years of age. Those who meet the credit rating and Gyeonggi Province residency requirements can receive a 1% annual interest, 500,000 won non-examination loan. With examination, loans of up to 3 million won are possible.

Non-examination loans (500,000 won) and examination loans (up to 3 million won) can be applied for starting July 15 at on-site reception centers operated by each city and county. Examination loans require specific counseling and document submission, and loan amounts will be differentiated through examination, ranging from 1 million won to 3 million won.

For more information about loan application methods and required documents, applicants can contact the 'Gyeonggi Extremely Low Credit Loan' dedicated call center (1800-9198) or the 'Extremely Low Credit Loan bulletin board' on the Gyeonggi Welfare Platform (ggwf.or.kr).

Lee Byung-woo, director of Gyeonggi Province's Department of Welfare, stated, "When we opened the first-round application on April 1, demand for the extremely low credit loan was high, with more than 40,000 residents applying within just one week," and added, "We will do our best to provide practical assistance to financially marginalized residents of our province through not only loans but also debt adjustment counseling and links to welfare services."

The province's first-round Gyeonggi Extremely Low Credit Loan, which ran from April 10 to 17, resulted in the disbursement of loans ranging from 500,000 won to 3 million won to a total of 36,393 people, including 30,145 non-examination loans and 6,248 examination loans. The province plans to support approximately 20,000 people in this second round of the project and is planning a third round of applications in the second half of this year.

Meanwhile, Gyeonggi Province Governor Lee Jae-myung posted an article titled 'Young Adults in Their 20s Targeted by Lenders Dangling Employment Bait' on social media on the 23rd and stated, "Please report illegal loans to Gyeonggi Province; we will definitely crack down on illegal lending. We will also start a program offering loans to victims of illegal finance at 1% annual interest in July," thereby announcing the implementation of the 'Illegal Finance Victim Loan' program.