The Credit Counseling and Recovery Service (CCRS) has expanded its microloan support target to include individuals who have faithfully repaid their debts for a certain period among users of financial companies' in-house debt workout programs. This aims to reduce the blind spots in financial support for low-income earners by strengthening the system that leads to additional financial support following debt adjustment.

Support of Up to 15 Million Won for Faithful Repayment of 6 Months or More The Credit Counseling and Recovery Service announced that, starting from the 15th, it has expanded the eligibility for 'CCRS Microloans' from faithful repayers undergoing the CCRS or court personal rehabilitation procedures to include 'faithful repayers under financial firms' in-house debt workouts.'

With this institutional improvement, borrowers currently utilizing financial firms' in-house debt workouts who have faithfully repaid without default for six months or more can receive microloans under the same criteria. The CCRS microloan program provides up to 15 million won for living stabilization funds, business operating funds, and school expenses at low interest rates ranging from 2 to 4 percent per annum.

Aiming to Supply 420 Billion Won This Year The market analyzes this as a measure to improve access to policy-based microfinance for vulnerable borrowers, whose financial difficulties are intensifying due to an economic slowdown and a high-interest rate environment. In particular, there is an evaluation that the safety net's role has become crucial in preventing low-credit and multiple debtors—who have difficulty using mainstream financial institutions—from being driven into illegal private loans.

CCRS Chairman Kim Eun-kyung stated, "We will strengthen the linkage between private financial companies' efforts to support debtor repayment and the committee's microloan system to create a virtuous cycle that leads to necessary financial support even after debt adjustment." She added, "We plan to build a denser financial safety net so that faithful repayers can smoothly return to economic activity."

The CCRS plans to promote the supply of a total of 420 billion won worth of microloans this year by adding new funding sources to the existing annual supply scale of 120 billion won. In addition, it intends to utilize the credit guarantee function of the Korea Inclusive Finance Agency to establish a stable supply base. There is a steady demand for policy-based microfinance because emergency funding needs for hospital bills, rent, living expenses, and small business operating costs often arise again after debt adjustment. However, it is often difficult for these individuals to use general financial sector loans due to credit rating downgrades or issues with their financial history.

How to Apply and Inquire Users of financial firms' in-house debt workouts wishing to apply for a CCRS microloan can receive counseling through the Credit Counseling and Recovery Service's counseling centers. Detailed eligibility criteria and application procedures are also available on the CCRS website and mobile app.

Meanwhile, the financial authorities advised that if individuals suffer damages from illegal high-interest loans or unregistered moneylenders, they can seek help through the Financial Supervisory Service's Illegal Private Finance Reporting Center. Those experiencing repayment difficulties due to excessive debt can also receive support through the Korea Inclusive Finance Agency or the CCRS counseling centers. The financial authorities particularly urged caution, noting that illegal loan contracts exceeding an annual interest rate of 60 percent can be rendered completely invalid, including both the principal and interest.

[※ This article was written with the assistance of AI. The information provided in this article is intended to aid general understanding of policies, and actual results may vary depending on the application of the policy and individual circumstances. Since government policies are subject to frequent changes, please be sure to check official materials from the relevant authorities. This publication assumes no legal or financial responsibility for this information.]