Inclusive Finance Task Force Holds Forum on Financial System Redesign

The Financial Services Commission is pushing for a plan to redesign the financial system with a focus on 'inclusion over avoidance.' To this end, the 'Inclusive Finance Strategy Promotion Team' has been fully mobilized, and a large-scale forum was held to hear voices from the field.

This forum was organized to highlight that inclusive finance is not merely a one-off policy but a crucial task that fundamentally transforms the financial system, and to identify the root causes of why citizens facing difficulties in financial access, such as low-income individuals, struggle to utilize institutional finance.

During the forum, it was pointed out that the weakening of financial institutions' public roles has exacerbated financial exclusion. Concerns were raised that if the scope of individuals excluded based solely on quantitative criteria expands—including young people with insufficient financial history, temporary job losers, and low-income earners, despite their potential for recovery—it could lead to increased inequality and social conflict costs. To overcome the limitations of large financial institutions, which find it difficult to cover financially excluded groups, proposals included establishing stable funding bases such as the 'Fund for Stabilizing Finance for the Public' and strengthening private sector innovation and roles to shift the financial structure, which primarily focuses on real estate collateral and high-credit borrowers, towards inclusion of small and medium-sized enterprises and low-income households.

The financial industry proposed incentives for expanding inclusive finance, such as reductions in contributions and deregulation of data to vitalize alternative credit scoring. They suggested establishing a virtuous cycle structure combining three pillars—quantitative expansion, interest rate burden relief, and strengthening alternative credit scoring—to mitigate the soundness burden stemming from high delinquency rates among middle and low-credit borrowers.