[비즈한국] As President Lee Jae-myung consistently promotes inclusive finance for low-income households, financial authorities and institutions are picking up the pace. The Financial Services Commission has launched the 'Inclusive Finance Strategy Promotion Team' in earnest to revitalize inclusive finance, and banks have also begun expanding medium-interest loans. They are addressing the limitations of credit evaluation systems and the exclusion of low-credit borrowers, which the President pointed out.
While President Lee Jae-myung is criticizing private financial institutions like banks for excluding low-credit borrowers, it appears that government-led financial support for such individuals is not being properly implemented. The loan and guarantee performance of the Korea Inclusive Finance Agency for low-credit borrowers is declining, and the principal debt reduction rate of the Credit Counseling and Recovery Service remains stagnant. Consequently, experts point out that the government must first reform its ongoing support for low-credit borrowers and credit recovery projects to align with the goals of inclusive finance.
Since the beginning of his administration, President Lee Jae-myung has emphasized that finance should not merely act as an intermediary for funds, but should be reborn as 'productive finance' that drives the nation's high-tech industries and 'inclusive finance' that protects the lives of ordinary citizens. Recently, he has been increasingly vocal in demanding that financial institutions take the lead in inclusive finance.
In fact, at a cabinet meeting on the 6th of last month, President Lee stated, "Inclusive finance is one of the obligations of financial institutions," adding, "The very idea that financial institutions exist solely to make money is a problem." He continued, "(The role of banks) includes a sense of public interest, but currently, that public nature is too weak. They only provide loans to those with high credit ratings, and if you don't meet that, they don't even consider you as a target, forcing everyone to rely on the secondary financial sector, loan sharks, and private lenders. That shouldn't be happening, should it?"
In response to President Lee's mandate, the Financial Services Commission decided to launch the 'Inclusive Finance Strategy Promotion Team' this month. Through this, they intend to promote a 'fundamental redesign' of the current financial system that causes financial alienation among low-income brackets and to make inclusive finance a key performance indicator (KPI) for management rather than just a way to meet quotas. Accordingly, commercial financial institutions such as banks are also promising to expand financial support for low-credit borrowers and are engaging in inclusive finance.
While President Lee Jae-myung is scolding financial institutions for their lack of inclusive finance, critics argue that the inclusive finance performance of public institutions is also lackluster. According to the National Assembly Budget Office, the government established a public institution called the Korea Inclusive Finance Agency in 2016 to support the smooth financial lives of ordinary people under the Microfinance Support Act. The Korea Inclusive Finance Agency conducts Sunshin Loan guarantees for the vulnerable and direct loan businesses to prevent them from falling into illegal private financing.
However, the proportion of low-credit borrowers among these loan and guarantee supplies is decreasing. Looking at the guarantee and loan performance of the Korea Inclusive Finance Agency by credit score bracket, the proportion of loans for those in the bottom 10% was 66.1% in 2023, but dropped significantly to 53.1% in 2024. In 2025, the proportion fell below the 50% mark to 49.1%.
Conversely, the proportion of loans for those with credit scores above the bottom 20% increased from 23.3% in 2023 to 35.9% in 2024, and rose to 40.1% in 2025. While this may have been done with debt repayment capacity in mind, it is far from the purpose of the Korea Inclusive Finance Agency's establishment, which was to increase financial accessibility for the working class and the vulnerable. It also conflicts with the direction of inclusive finance emphasized by President Lee.
Debt adjustment to help vulnerable debtors recover from difficulties due to long-term loan delinquency is also currently stagnant. The Credit Counseling and Recovery Service operates a debt adjustment system between financial companies and individual debtors, but contrary to the trend of strengthening support for the vulnerable, the principal debt reduction rate has remained flat. In the case of the 'Individual Workout' program for those with long-term delinquencies of 90 days or more, the reduction rate showed an upward trend from 38.4% in 2018 to 44.5% in 2019 and 52.3% in 2020.
However, after reaching 56.3% in 2021, the reduction rate has stalled, recording 55.9% in 2022, 54.6% in 2023, 54.9% in 2024, and 56.9% in 2025. Furthermore, as debt repayment periods continue to lengthen, problems are arising where the credit recovery and economic revitalization of the vulnerable are being delayed.