The Lee Myung-bak administration is stepping up its policy of helping the poor and underprivileged ride out the hard times arising from the unprecedented global economic crisis. Such a policy will be translated into action in the form of microcredit banks in December. It is certainly welcome news for people with low-credit ratings who are denied access to bank loans. We hope the microcredit program will bring real benefit to those who are in need of help.
It is true that the Lee government has so far done little to sincerely take care of low-income earners and poor families, as it put more stress on stimulus packages to jumpstart the recession-hit economy following the worst crisis since the Great Depression.
And critics complained that the President was paying only lip service when he talked about a ``people-friendly'' policy to deflect criticism for his much-avowed pro-business stance. His economy-boosting measures such as tax cuts and fiscal and monetary expansion have been under attack for benefitting only the rich.
Against this backdrop, the creation of microcredit banks will give Lee more maneuvering room to show the public that he is doing something to make good on his pledges to work for those in the lower income bracket. Of course, the microcredit program is not Lee's own idea.
It already made a debut in 2007 to solve the chronic problem of credit defaulters under former liberal President Roh Moo-hyun. Then, it was more of an initiative by nongovernmental organizations to help the socially weak. But the program has so far made little progress to make sufficient loans available for the poor.
Now, the Lee administration is taking the lead in establishing microcredit banks to overcome many of their stumbling blocks. It seems that the government can no longer delay the creation of ``banks for the poor'' as low-income earners suffer the most in the wake of worldwide economic firestorms.
In fact, the poor are left out in the cold due to the loose social safety net, which is not able to properly tackle rising job cuts and falling wages. Therefore, the microcredit program should serve as an institution to supplement the nation's porous welfare system.
The microcredit program is a long-term measure to lend 2 trillion won ($1.7 billion) over the next 10 years to those who cannot borrow money from commercial banks because of their poor credit ratings. Local conglomerates will donate 1 trillion won, while banks will contribute 300 billion won to the microcredit funds. The remaining 700 billion won will come from dormant bank accounts whose depositors cannot be traced. This microcredit system is modeled after the Grameen Bank for the poor introduced by Bangladesh Prof. Muhammad Yunus.
To ensure the success of such a bank, the government, banks and corporations should work together to provide not only low-interest loans, but also rehabilitation programs to the beneficiary of microcredit. The ultimate goal is to help those in need get back on their own feet.