Hi all, today I’d like to share with you the news on Korean government’s efforts to fight off illegal financial activities. On Monday December 17, the South Korean Prime Minister, Kim Hwang-Sik, held a conference on abolishing illegal private loans. The conference examined a progress up to date and discussed future plans.
So, who was at the conference? It was attended by the officers from relevant government ministries and financial institutions working on the issue of low-income households. To tell you the details, the relevant entities are as follows; the Prime Minister’s Office, Financial Services Commission, Ministries of Strategy and Finance, Public Administration, National Police Agency, and the National Tax Service.
Until now, there’s been a significant progress in abolishing illegal private loans, as below:
- During the reporting period (from 18th of April to 7th of December 2012), the government received approximately 860,000 reports of illegal and unlawful financial activities. This number shows a significant increase from the previous year, considering that the Financial Supervisory Service (FSS) received 25,000 reports throughout the entire span of the last year.
- Prosecutors’ Office and National Policy Agency have intensively cooperated, which led to 10,702 cases being reported and accused of illegal private loans. Among the cases, 290 criminals were jailed for their financial crimes. This is about 188% increase from the previous year, when 5,704 illegal loans were reported and arrested.
- Financial support program for low-income households
- The government provided financial and legal consultation service to about 86,000 people who reported illegal private loans or asked for financial help.
- Among 30% of the applicants for low-income household loans (667 out of 2217) successfully received loans.
The key policies to wipe out illegal private loans are as follows:
- Enforcement of responding system, e.g. receiving report → providing consultation service to victims of illegal financial activities→ investigation/crackdown and providing financial and legal support
- Activation of low-income household financial support centers not only in local areas
- Increasing the linkage between low-income household financial support center and employment/welfare system
- Expansion of legal support through information sharing such as obligatory reporting system
- Enhancement of crackdown by local government institutions
- Pre-emptive measures for damage prevention; ban on using an illegal use of the words ‘low-income household finance’, and enhanced regulation and supervision for financial businesses dealing with private loans.
Right after the conference, the Prime Minister visited FSS and Seoul Credit Guarantee Foundation’s Mapo branch to inspect consultation/financial support center for financially damaged victims. He encouraged the relevant officials’ efforts to help victims of illegal financial loans, and emphasized that such illegal financial practices should be completely eradicated.
Against the currently harsh economic climate, it is even more important to support the low-income households’ financial difficulties. Illegal private loans hamper the lives and families of financially vulnerable households. It is expected that the government will enhance the crackdown of illegal private financial loans.