Head of Inclusive Finance Agency Considers Funding Strategies

Support aimed at alleviating the financial burden on vulnerable populations may be expanded. Kim Eun-kyung, director of the Korea Inclusive Finance Agency (FSCI), stated at a press conference held on the 7th at the FSCI's Seoul office to mark her 100th day in office, "FSCI's capacity for policy lending doesn't just materialize out of necessity; therefore, stable resource creation is critically important."

Kim argued, "Banks and financial institutions select prime borrowers and exclude other groups from the financial system, creating social risks. In principle, resources should come from these institutions." Regarding the expansion of contributors, she explicitly mentioned securities firms and cryptocurrency exchanges, stating, "Loans are not just provided by banks and life insurance companies. Since stock investors also take out significant credit loans, the stock market bears a certain responsibility." She added, "Cryptocurrency also involves leveraged investments, so it could be a contributor anywhere."

FSCI plans to launch a 'Financial Basic Rights Research Group' this month to establish a logical framework for financial basic rights. The possibility of integrating FSCI and the Credit Counseling and Recovery Service (CCRS) was also discussed. With approximately 30% of the two institutions' work overlapping, Kim said, "If necessary for realizing financial basic rights, integration could be one option." Addressing concerns about 'conflicts of interest,' she remarked, "Banks lend money and also conduct their own debt restructuring." She further stated, "FSCI already combines policy lending and debt restructuring, so the conflict of interest argument no longer holds."

The recent deterioration of economic conditions, including high oil prices and exchange rates, has increased FSCI's burden of default guarantees, it was noted. Kim revealed, "As figures show an increase in demand for policy funds and bankruptcy cases last month, default guarantee payments are rising, and recovering claims will not be easy." She added, "We are preparing measures to establish an early warning system for proactive risk management."

Kim, who served as a member of the first division of economic affairs on the State Planning Committee when the Lee Jae-myung administration was launched, previously served as the first female deputy governor (Head of the Financial Consumer Protection Bureau) at the Financial Supervisory Service during the Moon Jae-in administration.