Financial Sector to Inject 800 Billion Won Into Smile Microfinance, Boost Inclusive Lending

Seven Companies and Financial Institutions to Contribute Funds in Installments Over Up to Five Years

An additional 800 billion won will be allocated to the Smile Microfinance program, which provides low-interest loans to people with low incomes and poor credit.

The Financial Services Commission said on October 30 that it had signed an agreement with seven companies and financial institutions and the Korea Inclusive Finance Agency at the agency's office in Jung-gu, Seoul, to contribute a total of 800 billion won to Smile Microfinance.

The agreement was joined by NH Financial Group, Samsung Life Insurance, Shinhan Bank, Woori Bank, KB Kookmin Bank, Hana Bank and IBK Industrial Bank, which announced their participation in this year's Smile Microfinance program and their intention to contribute funds.

Samsung will contribute 200 billion won, while NongHyup, Shinhan Financial Group, Woori Bank, Kookmin Bank, Hana Bank and IBK Industrial Bank will each contribute 100 billion won. These companies and financial institutions plan to provide the funds in installments to their respective Smile Microfinance foundations over a period of up to five years.

An agreement for NH Financial Group to join the Smile Microfinance program was also signed that day. NH Financial Group plans to establish the NH Smile Microfinance Foundation by the end of this year and provide support through the program, focusing on financially vulnerable people in rural areas.

With the establishment of the NH Smile Microfinance Foundation, the total number of institutions implementing the Smile Microfinance program will rise to 39. The number of Smile Microfinance branches, which stood at 168 as of September this year, is also expected to increase gradually to around 180 next year.

At the signing ceremony, Financial Services Commission Chairman Lee Eog-weon stressed the importance of the program's delivery system, saying, "Smile Microfinance should begin with thorough pre-loan counseling, be linked to welfare services, and be built on relationships between people." He added, "We will form a consultative body bringing together the government, Smile Microfinance foundations and the Korea Inclusive Finance Agency. We will jointly set the direction for operating Smile Microfinance and regularly gather feedback from the field."

The Korea Inclusive Finance Agency plans to boost the provision of Smile Microfinance by expanding the number of institutions and branches delivering the program, while strengthening support on the ground through improvements to counseling and loan agreement procedures and expanded work-related training.

It also plans to provide related support, including rapid data-system integration and system development, when each foundation develops products.

Kim Eun-kyung, president of the Korea Inclusive Finance Agency, said, "We will actively support efforts to ease financing difficulties for young people, small-scale self-employed business owners and financially vulnerable groups through Smile Microfinance."

This content was produced with the assistance of AI translation services.