Dong-A Ilbo Campaign to Help Relieve Household Debts

The worsening economic downturn is reminiscent of the Asian financial crisis 11 years ago, when many people lost their jobs from corporate restructuring.

Fears are rising that the lower income class and part of the middle class could join the poor because of an inability to pay debts.

The Dong-A Ilbo, the Health, Welfare and Family Affairs Ministry and Hana Financial Group have launched the campaign “Clinic of Hope – Getting Rid of Household Debt.” The campaign will provide lower income households with free financial counseling on effectively managing and resolving their debts and grant microcredit without collateral to help them stand on their own two feet.

Low income earners suffering from heavy debt can first assess their financial condition through a “debt clinic” provided by the ministry. They can also specifically consult with financial experts on what their priorities are in getting rid of their heavy debt.

Applicants whose commitment and capabilities are verified by the clinic can receive microcredit without collateral from Hana Hope Foundation, an institution to support financial rehabilitation funded by the financial group.

As part of a follow-up system, The Dong-A Ilbo plans to organize a group of experts on business startups, tax and accounting, and legal matters who will help the applicants deal with problems when running a new business. By enlisting volunteers with expertise in specific fields, the daily seeks to develop the campaign into a “secondary social safety net” sustained by the people over the long run.

“With the help of the debt clinic, this campaign will identify those who can rise again and provide them with microcredit. Its significance lies in that it will serve as a substantive and long-term platform on which they can stand on their own two feet again,” said Choi Hyeon-ja, professor of consumer and child studies at Seoul National University.

crystal@donga.com