[늘어나는 ‘불황형 대출’]
The loan threshold has been raised due to the reduction in the highest interest rate.
Instead of a large company, use high-interest illegal loans
“We need to reconsider our one-sided interest rate cut policy”
The interest rates of financial products for ordinary people such as card loans, savings banks, and large-scale loans are relatively high, and the borrowers’ burden of interest repayment is not easy. In order to reduce the burden on ordinary people, successive governments have continuously lowered the ‘statutory maximum interest rate.’ However, many analyses say that this policy of lowering the maximum interest rate is actually poisonous to low-credit borrowers. As the maximum interest rate has been lowered, the interest burden on large-scale customers has been reduced to some extent, but as large-scale lenders have raised the threshold for loans, vulnerable groups are being forced into high-interest illegal private loans.
The Korea Institute for Small Business Finance recently submitted a report to the Special Committee on Inclusive Finance under the Presidential Committee on National Integration, diagnosing that the cut in the maximum interest rate is actually increasing the burden on low-credit borrowers.
Previously, the legal maximum interest rate has been continuously reduced from 27.9% in 2017 to 24% in 2018 and 20% in 2021. Accordingly, the average loan interest rate for loan sharks has decreased from 19.6% at the end of 2017 to 13.6% at the end of last year. The researcher analyzed that loan shark users benefited from interest savings of approximately KRW 4.4 trillion during the period due to the decrease in loan interest rates.
The problem is that as interest rates dropped, large companies strengthened their loan screening and raised the threshold for loans, which led to a decrease in the number of users of large companies, and many ordinary people moved to the illegal private loan market. The researcher estimated that the interest costs of low-credit borrowers who were rejected by large companies and secured emergency funds through illegal private loans during the same period amounted to 24.4 trillion won. This is more than five times the amount of interest savings for large companies.
Ahn Yong-seop, head of the Korea Institute for Small Business Finance, said, “After implementing the policy (lowering the maximum legal interest rate), we need to analyze the impact and go through a feedback process, but this process was insufficient,” and “The policy of only lowering the maximum interest rate needs to be reconsidered.” Kim Sang-bong, professor of economics at Hansung University, also said, “Although the maximum legal interest rate has been maintained at 20% since 2021, contrary to the intention of the policy, it is actually worsening the situation in which vulnerable groups are being pushed into illegal private lending.”
The political world is pushing for revisions to related laws to prevent recurrence of damage to vulnerable groups due to illegal private lending. The amendment to the Loan Business Act sponsored by Democratic Party of Korea lawmaker Park Sung-joon includes provisions such as: △ increasing the minimum capital requirement of the Loan Business Act from the current 10 million won to 300 million won, a 30-fold increase; △ nullifying all interest when entering into a loan contract with a maximum interest rate (currently 20%) exceeding the maximum interest rate. The amendment sponsored by the same party lawmaker Cheon Jun-ho includes provisions requiring the CEO of a loan business to have worked for at least one year as an employee of a loan business registered with the Financial Services Commission.
Reporter Kang Woo-seok [email protected]
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2024-08-13 23:03:38