Ex-Seoul Mayor Vows to Create Microcredit Bank
By Kang Hyun-kyung
Staff Reporter
A microcredit bank will be established to help people living in poverty who are not considered bankable, pledged presidential hopeful Lee Myung-bak of the Grand National Party (GNP), Sunday.
The former Seoul mayor unveiled the policy guidelines to help seven million citizens with bad credit ratings change their marginalized lives.
``There are many people in the country who cannot be self-sufficient on their own. The number is as high as seven million and I am standing here today to present a policy vision for them,'' said Lee.
The policy package he presented was composed of two broad schemes _ one was the creation of funds and an alternative bank to help the troubled citizens, and the other was the introduction of regulating bad practices in the private loan industry which demands high interest rates.
He pledged to create a microcredit bank, which will allow people not considered bankable to receive loans for start-up businesses.
``A total of seven trillion won will be raised under the scheme to fund credit restoration, and part of this will be used for the creation of the microcredit bank,'' he said.
The authority managing the credit restoration fund will receive details from people with poor credit ratings in regard to the money they owe the private loan industry.
It will then take over the loans and reschedule debt repayment plans in a feasible way so that they are able to pay them back during their lifetime.
Debtors will pay back their original loan, while the interest rate will be reduced.
The former Seoul mayor also pledged to introduce legislation governing private loans so that loan sharks will not be able to use ruthless methods to get their money back.
Private loans carrying high interest rates will be transferred to loans from the microcredit bank, which will make it easier for the debtors to repay them.
Lee said that in the past the government had created a public fund that was used for the restoration of the corporate and banking sector shortly after the Asian financial crisis in 1997-1998.
``Several troubled private entities came to be saved as a result of the fund. There were other cases that helped heavily indebted farmers in the past,'' he said.
It is now time to give a second chance to seven million citizens with poor credit through the alternative banking system, he added.
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