Politics · South Korea · 2 hrs ago
Gyeonggi Province to end low-credit loan scheme next year
Gyeonggi Province will end its Extreme Low-Credit Loan 2.0 scheme next year.
The program, restarted early this year under former governor Kim Dong-yeon, offered residents with very low credit scores loans of 500,000 to 2 million won at 1% annual interest.
It was designed for people who struggle to borrow from regular financial institutions.
Applications filled within 20 to 30 minutes on both occasions they opened this year, but lawmakers criticized the program’s operating costs as the province faced financial pressure.
The province says a similar national loan program is planned for next year.
The national program is due to launch in January, offering up to 1 million won to people with credit scores in the bottom half, at 4.5% annual interest over 10 years.
Gyeonggi expects about 43 billion won in repayments by 2032.
It plans to put that money into its general budget for other public projects.
Gyeonggi Province said it will end its Low Credit Loan 2.0 scheme next year.
The province cited ongoing financial difficulties and a similar central government loan scheme planned for next year.
Low Credit Loan 2.0 offers eligible residents loans of 500,000 to 2 million won at an annual interest rate of 1%, with repayment terms of up to 10 years.
The province said it expects about 43 billion won in repayments by 2032 and plans to use the money for other budget programmes.
The scheme drew criticism from provincial council members who said its operating costs were excessive.
- Who
- Gyeonggi Province said it will end the Low Credit Loan 2.0 scheme.
- What
- The province will stop the scheme and redirect expected repayments to other budget programmes.
- When
- Next year. The announcement was made on October 27, 2026.
- Where
- Gyeonggi Province, South Korea.
- Why
- The province cited ongoing financial difficulties and a similar central government loan programme planned for next year.
Gyeonggi Province
People Power Party members of the Gyeonggi Provincial Council
Reason for the scheme's end
Gyeonggi Province
The province said financial difficulties and a similar central government programme meant it would end the scheme.
People Power Party members of the Gyeonggi Provincial Council
Council members criticised the scheme's operating costs as excessive and argued that addressing financial difficulties should take priority.
Gyeonggi Province introduced the original Low Credit Loan scheme, which operated through 2022.
The province resumed the scheme as Low Credit Loan 2.0 during Governor Kim Dong-yeon's term.
The province opened applications twice, and both rounds filled within 20 to 30 minutes.
Gyeonggi Province announced that it would end Low Credit Loan 2.0 next year.
The central government's K-Minsaeng Guardian Loan is scheduled to launch.
- Loan range
- 500,000 to 2 million won
- Interest rate
- 1% annually
- Maximum repayment term
- 10 years
- Expected repayments
- About 43 billion won by 2032
- Planned replacement programme
- K-Minsaeng Guardian Loan, scheduled for January 2027
1 source
What people are saying
With financial difficulties continuing and the central government running a similar programme next year, we have decided to end Low Credit Loan 2.0.
We estimate that about 43 billion won will be repaid by 2032, and plan to transfer those repayments to the general account and use them for other budget programmes.