Samsung to limit size of homes eligible for employee loan program: sources

An aerial view of apartment complexes near Samsung Electronics Hwaseong Campus in Gyeonggi Province, June 30 / Yonhap

Samsung Electronics plans to tighten requirements for its employee housing loan program for workers without homes by restricting support to smaller residences, industry sources said Sunday, amid criticism such benefits could fuel property price hikes.

According to the sources, the Korean tech giant decided to limit eligible homes to those measuring 85 square meters or smaller, a widely preferred apartment size, in the greater Seoul area and six major cities.

In May, Samsung Electronics agreed with its labor union to offer housing loans of up to 500 million won ($326,700), depending on employees' positions, with an annual interest rate of just 1.5 percent.

The latest revision came as some critics raised concerns that such low-interest loan programs could be abused to dodge the country's lending regulations, eventually leading to further property price hikes.

In June, Financial Supervisory Service Gov. Lee Chan-jin said such corporate housing loans should be partially regulated for the public good, although there are also limits to such regulations under the market economy system.

The sources said Samsung Electronics, meanwhile, is considering abolishing differences in loan limits among employees and offering 500 million won to all applicants in exchange for introducing the size restriction.