The government plans to provide more cheap loans to support low income earners and allow them to defer debt repayments if they lose their jobs or are forced shut down their business, the financial regulator said Wednesday.
Choe Heung-sik, governor of the Financial Supervisory Service, made the remark at a job fair for low income earners.
Financial authorities have stepped up efforts to cut the financial burden on vulnerable borrowers, as the Bank of Korea is expected to raise its key rate in the coming months, marking its first tightening in more than six years.
|Financial Supervisory Service Governor Choe Heung-sik (Yonhap)|
Choe said the government "will expand a supply of policy financial products for low income earners" and allow them to put off repayments of principal on their loans if they run into problems.
To further reduce debt burdens for vulnerable borrowers, the government will encourage savings banks to refinance their debts if they want, Choe said.
Financial authorities have warned that the debt-servicing capacity of vulnerable borrowers may decline if the key interest rate is marked up. (Yonhap)