Conditions for Microloans to Be Eased

Eligibility requirements to receive microloans will be eased for low-income people amid criticism of the microfinance system for failing to help its targets.

Hong Yeong-man, director of the financial service bureau at the Financial Services Commission, told reporters yesterday that the commission is considering easing microcredit conditions jointly with Miso Microcredit Bank.

He said the existing requirements of at least two years of business experience or having at least half of the start-up capital are too demanding.

Launched last month, Miso was set up to extend unsecured low-interest loans to low-income people. Of 13,400 loan applicants, however, only 24 have received lending.

The commission will also develop loan programs for underprivileged people such as former North Korean defectors, orphans and multicultural families. In addition, separate loan programs will be introduced for women, who have a higher rate of loan repayment than men.

Miso will also increase the number of branches to some 100 by year’s end, raise the quality of its personnel, and set punishments for those giving out illegal loans or fraud.

peacechaos@donga.com