South Korea Tightens Borrowing Criteria to Prevent Defaults
Jae-yoon, J.

In order to prevent loan defaults, the South Korean government announced it will strengthen lending criteria for the state-sponsored low-interest Sunshine loans for low-income families. The Financial Services Commission (FCS) said that it will likely change credit evaluations to determine the size of the loans that would be granted to different classes of borrowers and may introduce restrictions to prevent borrowers seeking Sunshine loans outside of their residential area.

The recommendations follow a review of the current state of the microcredit loan program for the first time. “We have decided to improve credit evaluations on borrowers to reach those really in need while trying to prevent defaults from occurring,” said Kwon Hyouk-se, the FSC vice chairman.

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Related Links:

South Korea: 'Smile' Microcredit Gives Few Smiles to Needy

Sunshine Loans Launched to Help the Poor

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