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◈Financial authorities are promoting comparative disclosure of individual business loan products to support people’s finance, including reducing the interest burden on small business owners.

◦ This is to support busy self-employed individuals to compare loan interest rates at a glance and make rational choices. Through this revision of the enforcement regulations, the Financial Supervisory Service has established a basis for comparing and disclosing self-employed individual loan products.

◈ The enforcement regulations will be revised from today until October 13th and will be implemented in early December, with the goal of starting from the end of December. The Financial Supervisory Service plans to begin comparing and disclosing loan products for individual business owners through the “Financial Products at a Glance” (finlife.fss.or.kr) website.

◦ Comparative disclosure is designed to allow individual business owners to choose the product that is most advantageous to them by comparing and presenting various information such as average interest rates and repayment methods of loan products sold by financial institutions (banks, savings banks, credit unions, insurance companies, and credit unions).

◈In the future, individual business owners will be able to select reasonable loan products that fit their situation and purpose through comparative disclosures, and the time and cost required for comparison will be reduced. It is also expected that this will have the effect of improving financial services by promoting sound market competition.

◦ The financial authorities plan to closely prepare for the smooth launch of comparative disclosure of individual business loan products through cooperation with each financial association and central association.

※The full text of the revised enforcement regulations can be found on the “Financial Supervisory Service website (www.fss.or.kr) → Business data → Financial supervision laws and regulations information → Notice of revision of regulations.”

□ The financial authorities are continuously promoting people’s finance, such as reducing the interest burden on small business owners, and as part of people’s finance, they are promoting a comparative disclosure service for individual business loan products sold by financial companies through the revision of the “Enforcement Rules of the Financial Consumer Protection Supervision Regulations”

*Items reflected in “Financial Support Plan for Vulnerable Sectors to Improve People’s Livelihoods” (‘24.3.26., Joint Committee of Relevant Agencies)”, etc.

**Banks, savings banks, credit unions, insurance companies, credit unions

◦This is because the Financial Supervisory Service is planning to add “individual business loans” to the loan products that are currently being compared and disclosed through the “Financial Products at a Glance” website. The advance notice of the revised enforcement regulations will be conducted from today until October 13 (implementation targeted for early December)

*finlife.fss.or.kr

**Currently providing comparative disclosure services for ‘Housing Mortgage Loan’, ‘Rental Deposit Loan’, and ‘Personal Credit Loan’ products

□ While the financial cost burden on small business owners and other self-employed individuals has increased due to the prolonged high interest rates, it is difficult for self-employed individuals seeking loans to compare key conditions such as loan interest rates and repayment methods at a glance to make a rational choice.

◦In particular, individual business loans have different product characteristics than general personal loan products (such as housing mortgage loans).[가입대상 업종, 대출목적(운전자금·시설자금 등)]* The opinion was raised that it is difficult for busy self-employed people to directly compare the various options.

*’In the ’23 On-site Communication Team’, individual business owners complained of difficulties in visiting each financial company in person to compare and select loan products due to time and means constraints.

□ Accordingly, the financial authorities are promoting a comparative disclosure service for personal business loan products, following the housing mortgage loans, jeonse funds loans, and personal credit loans that have been comparatively disclosed through the “Financial Products at a Glance” (finlife.fss.or.kr) website.

◦In addition to loan products that are being developed and sold directly by private financial companies, we plan to include policy finance products that are being sold through agreements with guarantee institutions, etc., so that individual business owners can choose the product that is most advantageous to them from among various options.

□ “Individual Business Loan Products” added to the list of financial products subject to comparative disclosure by the Financial Supervisory Service according to the “Financial Consumer Protection Act”

◦Prepare the basis for the Financial Supervisory Service to compare and disclose loan products for individual business owners by receiving basic data from each financial association and central association, similar to the housing mortgage loans, jeonse funds loans, and personal credit loans currently being disclosed

□ New items to be reflected in the comparative disclosure of personal business loans and disclosure standards, etc.

◦Establishment of disclosure items and disclosure standards for each item, such as purpose of fund (start-up, repayment, etc.), loan repayment method (installment repayment, etc.), average interest rate of the previous month, and early repayment fee

Personal Business Loan Product Comparison Disclosure System Configuration (Draft)

◈The individual business comparison disclosure system is currently being organized into ①search screen and ②result screen, similar to housing mortgage loans and personal credit loans that are being disclosed.

① (Search screen) Provides options by main conditions so that individual business owners can easily search for reasonable loan products by considering their own circumstances and loan purpose.

[참 고] Key search criteria and options (draft)

Search Requirements

Choice

Purpose of Funds

General, Startup, Repayment, Revival

Eligibility

Young people, women, people with disabilities, online sellers*, people with low credit, professionals, others

Whether there is collateral or guarantee

Secured loans, guaranteed loans, credit loans

Repayment method

Equal principal, equal principal and interest, lump sum repayment on maturity, voluntary repayment

Regional classification

Banks, savings banks, credit specialists, insurance companies, credit unions

How to sign up

Sales outlets, internet, smartphones, recruiters, telephones, etc.

*Reflecting the results of the 4th Fair Finance Promotion Committee (‘24.5.30 press release distribution)

② (Results screen) Provides information on loan products that meet the conditions selected on the search screen.

The main product information presents key information such as the average monthly repayment amount and the highest and lowest interest rates for each loan product, and the sorting function allows comparison between loan products at a glance.

In addition, a detailed information button is provided to provide detailed product information such as early repayment fees, preferential interest rate requirements, and loan limits, as well as links (URLs) to the relevant financial company’s website.

[참 고] Example of results screen

Main Product Information

Details

Financial company

Product classification

Purpose of Funds

Whether or not there is collateral

Interest rate method

△△ Bank

common

Startup

Collateral

Variable interest rate

Product name

Repayment method

lowest interest rate

Highest interest rate

Monthly average

OO Individual Business Loan

Principal installment repayment

X.XX%

X.XX%

X.XX%

Ⅳ. Expected effects and future plans

□ In the future, through the comparative disclosure service, individual business owners will be able to easily compare various loan products and select a reasonable product that suits their situation and purpose, and the time and cost required for comparison will also be reduced.

◦ In addition, as it becomes easier to compare loan products, sound market competition is also promoted, and it is expected that financial services will be improved in the future, such as financial companies developing products that meet the actual financial needs of individual business owners.

□ The revised draft of the “Financial Consumer Protection Supervision Regulations Enforcement Rules” is planned to be implemented in early December after prior notice, and the service for comparing and disclosing loan products for individual business owners is scheduled to begin at the end of December.

◦ The financial authorities plan to closely prepare for the smooth launch of comparative disclosure of individual business loan products through collaboration with each association and central association.

※The full text of the revised enforcement regulations can be found on the “Financial Supervisory Service website (www.fss.or.kr) → Business data → Financial supervision laws and regulations information → Notice of revision of regulations.”