Gov¡¯t to offer loans to low-income workers

The Ministry of Labor Affairs announced Thursday that it has prepared 17 billion won in loans for workers suffering wage arrears and 13 billion won for the stabilization of the livelihoods of low-income workers.

The loans carry an annual interest rate of 6.5 percent with a three-year installment repayment plan after a one-year grace period.

At the same time, the ministry will implement a credit guarantee support system starting in July, under which low-income workers are able to receive the unsecured loans without. The government will back the repayment of the loans. At present, loans require a payment guarantee by someone with an annual income of more than 5 million won, collateral property or comprehensive land taxes.

Workers suffering from wage arrears for over two months during the past year are able to apply for loans of up to 5 million won per person. The government also has decided to extend up to 2 billion won in loans to a business owner on condition that he or she clears the back wages completely.

Kim Joon-Seok kjs359@donga.com