By Na Jeong-ju
Staff Reporter
The government will launch a microcredit foundation Thursday to collect funds from dormant accounts in banks and insurance companies to help low-income families.
The foundation will be responsible for managing 400 billion won of unclaimed money at financial firms. It will finance diverse programs for poor families..
``Some people will be able to get loans at subsidized rates to start their own businesses,'' said a spokesman from the Financial Services Commission. ``Some of the money will be used for credit recovery programs aimed at helping those who cannot use banks due to their poor credit records.''
The commission is expected to reveal details of some programs at a launching ceremony at the Korea Chamber of Commerce and Industry building in central Seoul. Participants will include FSC Chairman Chun Kwang-woo and many presidents of banks and insurance companies.
The National Assembly endorsed the agency last June through legislation. In the long term, the government will turn the foundation into a lending institution for the low-income bracket, according to the regulator.
The total amount of funds in dormant accounts is estimated at 398 billion won. It breaks down to 201 billion won at banks, 120 billion won at life insurance firms, 71 billion won at non-life insurers and 5.6 billion won at merchant savings banks.
Financial firms will contribute the unclaimed money to the foundation by the end of March. If depositors claim the money after the foundation is set up, it must give the money back to accountholders.
According to the FSC, credit defaulters are currently estimated at some 3 million, while those who are unable to get bank loans due to past credit problems have surpassed 4 million.
During the presidential campaign, Lee Myung-bak said he would set up a 7 trillion won fund to help delinquents recover their financial health. Lee promised to establish a presidential body to help credit delinquents restructure their debts, as well as microcredit banks for loans to those who are denied access to financial companies.