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$221 million total goes to cheap loans for disadvantaged
November 17, 2009
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| Eighteen local banks will donate 255.5 billion won ($221.4 million) in total by 2012 to the Microfinance Foundation, a state-led program which will provide unsecured loans to low-income households. Executives at the banks signed the donation agreement at the Korea Federation of Banks office in central Seoul yesterday. The lenders will also invest 700 billion won from so-called “dormant deposits” - small accounts that have been idle for years - in the foundation over the next 10 years. “It has great meaning that even foreign banks operating in Korea including the U.S.-based Citibank and the U.K.-based SC First Bank have decided to participate in the donation to the foundation,” the association said in a statement. “It is part of banks’ efforts to fulfill their social responsibility.” The group of 18 banks includes four state-run institutions: Korea Development Bank, the National Agricultural Cooperative Federation, the Export-Import Bank of Korea and the National Federation of Fisheries Cooperatives. Also in the group are seven Seoul-based commercial banks - Hana Bank, Shinhan Bank, Woori Bank, Korea Exchange Bank, Kookmin Bank, SC First Bank and Citibank Korea - along with six regional banks - Daegu Bank, Busan Bank, Kyongnam Bank, Kwangju Bank, Jeonbuk Bank and Jeju Bank. “We expect other banks and companies to join our move,” said Kim Seung-yu, head of the microcredit lender. “The interest on our loans will be under 70 percent banks’ ordinary loan rates.” According to the Financial Supervisory Service, up to 250,000 families will benefit from the program over the next decade. The foundation will open 20 to 30 regional units by May 2010 and raise that to 200 to 300 in the next two or three years, the agency said. Four banks - Shinhan, Woori, Hana and Kookmin - also set up their own microcredit foundation recently. By Moon So-young [symoon@joongang.co.kr] The chief executive officers of 18 local banks pose after signing a pledge to donate a total of $221.4 million by 2012 to the Microfinance Foundation, which will provide unsecured loans to low-income households, at the Korea Federation of Banks headquarters in Myeong-dong, central Seoul yesterday.[YONHAP] |
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