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Community finance in Korea : Policy directions

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Community Finance in Korea: Policy Directions
[ Summary ]
■ Expanding the supply of community finance to restore lower income persons to the middle class and prevent a further drop of their income has emerged as a key policy task, and also is critical in terms of the completeness of the financial markets. ○ However, since financial companies shun lending to such segments for their high credit risk and the convenience of secured loans, the g o v er nm ent needs to first lead the vitalization of community finance ○ With this policy as a vehicle, community finance will then be able to expand based on market principles.
■ The Korean government has been offering guaranteed 'sunshine' loans and 'smile' microcredit to minimize such problems, but these have come under criticism. ○ S e t t in g and then fine-tuning medium- to long-term policy directions is vital to addressing these challenges and assuring the sustainabilit y of community finance.
■ A desirable shape for the community finance market is to construct a mul t ip l e - l a y er structure in which financial institutions provide u n s e c u r e d loans (loans without collateral) based on the credit wor thiness of customers at a variety of interest rates between
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Summary
those of secured loans and the interest ceiling. ○ From the loan customers' perspective, a multiple-layer structure in the unsecured loan market means that multiple financial companies exist that offer a variety of credit loan products by region and cust


Full Text
Title Community finance in Korea
Similar Titles
Sub Title

Policy directions

Material Type Reports
Author(English)

Jeong, Chan Woo

Publisher

Seoul:Korea Institute of Finance

Date 2011-02
Series Title; No Finance VIP Series
Pages 40
Subject Country South Korea(Asia and Pacific)
Language English
File Type Documents
Original Format pdf
Subject Economy < Financial Policy
Holding KIF; KDI School