Sunshine Loan (Micro Credit loan ), So Far, So GOOOD

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Sunshine loan, so far, so Good

Sunshine loan was introduced in late July to support economically under-priviliged people, who normally disqualify for a loan from commercial banks. Those with credibility level lower than 5 – with level 9 being the least ‘trustworthy’ – had to search loan programs from the 2nd sector finance where interest rates immensely high thus a probable initiation of vicious cycle of financial difficulty. Sunshine loan set its goal to help those with financial difficulties as a form of microloan. Those qualified to apply are under 5 credibility level and annual income less than 40,000,000 won, or annual income less than 30,000,000won. Sunshine loan was of great popularity since is start, as constant advertisements roamed across subways. As of August 25th, 45,000 loan contracts with 398,200,000,000 won of total loan size. Just in a month.

Then Sunshine loan encounters a subtle change, as loans were provided than predicted. Government had to consider expanding its source of capital, strengthen application criteria. The contents of loan usage is mostly on maintance fees, 50.1%, essential living costs, 49.8 % while business initiating is merely 0.1%. The loaners are mostly those under credibility level 6 (75.1%), which implies the policy indeed hit its goal to find itself useful to those under economic difficulties. Those of credibility level 1 to 5 and annual income less than 20,00,00 won were 24.9% of total users. While credibility level 9 and 10 composed merely 4.1% of total users, their ratio in reference to the total ‘avaliable users’ were high.
Now finance committee is seeking that sunshine loan has made its take off and now in a stable stage to concrete its status as a specified loan programme. These days, last week of October, waiting lists are shortening and average loan size is decreasing slightly to 880,00,00 won of 1,015 cases.
Similar micro loans are launching, encouraged by sunshine loan’s success, such as ‘Hope Seed Loan’ as well. Finance committees now have to face a challenge to defend the system against abuses via monitoring habits and strict credit investigation to prevent any possible risk concerning the huge capital source for lower class.

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