Experts urge integration of microcredit products, resources

“New, hope, spore? What do these represent?”

A brand-naming expert working for a global company asked this question. “New hope spore” is the name of a new loan product for the poor, and the expert said the name went too far.

Hope spore loan was a loan for people with low credit ratings. In 2010, Korean banks further lowered the requirements to take out a loan and changed the name to “new hope spore loan.”

The expert said, “Any word longer than five letters is difficult to memorize for Koreans. But this name put together three words to deliver many messages. If there are too many meanings, no message is delivered.”

Commercial-naming experts said many brand names are composed of Korean and English words, creating an invisible threshold for users. Other than new hope spore, “haetsal (sunshine) loan” and “miso (smile) finance” were given as examples.

“Kangaroo savings account” was mentioned as another good example. Consumers can readily recognize that the product is for children by looking at the kangaroo symbol and easily remember the name.

Experts also advised that each bank needs a unique brand that penetrates all products that have been separately operated. Min Eun-jeong, director at the brand consulting company Inter Brand, said, “(Banks) should make their own brand identity through brand slogans or certification marks.”

Many experts say a government body is needed to prevent small-loan finances from going out of control.

Son Sang-ho, a senior researcher at the Korea Institute of Finance, said, “Policy-driven microfinance products are operated by different bodies while targeted people and contents overlap among products. Establishing a financial corporation dedicated to microfinance and have it manage all finance products for the poor is one solution.”

Financial authorities say a variety of systems and products are necessary given the various circumstances the poor face, meaning the integration of microfinance resources is difficult because they are handled by many organizations such as private, public and government bodies.

“A one-stop window is said to be a good solution," said Kim Yong-jin, a business professor at Sogang University in Seoul. “Though many parties operate financial services for the poor, user experience can be improved if customer windows are integrated into one and operators cooperate with each another to harmonize their works.”

abc@donga.com