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Guidelines eased on policy loans for low-income earners

All Headlines 12:00 April 02, 2017

SEOUL, April 2 (Yonhap) -- South Korea's financial regulator said Sunday that it has eased guidelines on policy loans for low-income earners, allowing them to benefit from the government-backed micro-financing programs.

Details of the eased guidelines were finalized at a meeting between Jeong Eun-bo, vice chairman of the Financial Services Commission (FSC) and representatives from private banks on Friday, the FSC said in a statement.

The move is aimed at helping owners of mom-and-pop stores and college graduates, who are struggling with weak domestic consumption and tougher job markets, the regulator said.

Jeong said in the statement that low-income earners would be the hardest hit if market interest rates rise and volatility in the financial markets increases.

Under the measures, the FSC lowered the credit rating of policy loan program Miso Finance to the sixth level or lower from the current seventh or lower. The policy loan program is designed to help those who seek to launch or operate their own businesses.

It also raised the lending limits of other policy loans and extended their grace period.

Last year, banks loaned about 5 trillion won (US$4.5 billion) to low-income earners throughout such micro-financing programs, the FSC said.
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