Gov`t to enact special law on private financing

The government is considering the enactment of a law to protect users of private financing, which is posing an increasing social challenge. Under the envisaged law, private money lenders would be required to register with the government and interest rates would be limited for borrowers of small amounts.

An official of Cheong Wa Dae said Thursday that a special law needed to be enacted to protect citizens that have no other means of obtaining loans than the curb money market. The official said that ways would also be sought to curb the occurrence of bad credit holders as far as possible, so as to reduce the number of users of the curb market.

The government is also considering ways to remove the credit records of 990,000 people who remain classified as bad credit holders even after they have repaid their debts. It is also reviewing a plan to set a grace period for those with small-amount deferred payments.

Yun Seung-Mo ysmo@donga.com