Amnesty to be given to bad credit holders in May

The government and the ruling Millennium Democratic Party (MDP) agreed Wednesday to finalize measures to protect users of small-loan finance at their meeting to be held this Friday. Among measures under consideration is one to exclude 990,000 people from the list of 2.32 million with bad credit ratings. Officials said that these people are having difficulty in taking out loans from financial institutions, as they remain to be bad credit holders even after they repaid debts.

Rep. Kang Un-Tae of the MDP said that consultations between the government and ruling party on measures to facilitate small-loan finance are in the final stage. If finally fixed, the amnesty will be given on May 1, he said.

In addition, to prevent an increase of bad credit holders due to the reckless issuance of credit cards, the government and ruling party decided to revise related regulations and allow credit-card issuances only to those with enough incomes or assets. At present, anyone aged 18 and over is eligible to get credit cards.

They also decided to impose a one-year grace period before classifying small-loan takers, say less than 1 million won, as bad credit holders. Currently, the status is given to those with arrears for more than three months.

Yoon Jong-Koo jkmas@donga.com