The National Planning Committee has selected the “Common People’s Financial Stability Fund (tentativ..

The National Planning Committee has selected the “Common People’s Financial Stability Fund (tentative name)” as a national task, which brings together government budgets for financial support projects for vulnerable groups. When the fund is launched, it will be able to manage financial resources flexibly. Increasing profits through financial management can afford to lower interest rates on products such as Sunshine Loan.

According to the political and financial sectors on the 2nd, the National Planning Committee reported to President Lee Jae-myung face-to-face on state affairs, including the establishment of the Financial Stability Fund for the working class, on the 1st.

The Low-income Financial Stability Fund is an organization to be established in the Korea Institute for the Promotion of Low-income Finance (Sogeumwon), and has the advantage of being able to manage financial resources flexibly by removing budget partitions tied to each project. Currently, it was pointed out that the budget is tied up by project, so it is not possible to use financial resources flexibly. For example, even if the special guarantee budget remains, it cannot be used for Sunshine Loan. It can be converted after going through the Financial Services Commission approval process, but the process was complicated and took a long time. In the end, whenever additional financial resources were needed, they had no choice but to receive budgets or donations.

When the fund is set up, this partition problem is solved. If profits are generated by operating the fund, it can be used again to supply finance to the common people. It is also possible to strengthen the benefits of existing products or expand the target based on increased financial resources. Analysts say that a certain level of financial independence can be secured away from the structure of only looking at government budgets and donations from the financial sector.

This year, Seo Geum-won’s financial resources for ordinary people totaled 1.629 trillion won. Among them, the government’s budget, including the lottery fund and the general budget, amounts to 403.1 billion won (38%). Currently, most of this amount is fixed for each project, but if it is funded, it will be converted into a budget that can be used flexibly. On top of that, if a fund is created in which the financial sector participates jointly, the total amount of financial resources is expected to expand further.

The Financial Services Commission is considering a specific fund type. As a way to set up the fund, a method of integrating complementary accounts and self-support accounts into a single fund and a method of funding only complementary accounts are being considered. The integration of the two accounts expands the scope of financial use, but some argue that the insolvency rate of the self-support account project is relatively high, which could put a burden on the fund’s soundness management. Guarantee projects such as Sunshine Loan and Special Guarantee will be operated in supplementary accounts, and illegal private financial prevention loans and financial consulting will be operated in self-support accounts.

In order to establish a fund in Seogeumwon, it is necessary to amend the “Act on Supporting the Financial Life of Common People” and the “National Finance Act”. The Financial Services Commission pushed for the establishment of similar funds in 2016 and 2021. However, at that time, it was canceled due to opposition from the Ministry of Strategy and Finance. The Ministry of Economy and Finance has maintained a cautious position due to concerns that the establishment of a fund could be overused under the National Finance Act. Usually, if there is a loss from the fund, the government has to take it on.