By Kang Hyun-kyung
Staff reporter
North Korean defectors here will be entitled to receive loans when establishing their own start-up business, the Ministry of Unification said Tuesday.
The ministry signed an agreement with the Hyundai Motor Group Smile Microcredit Bank to help "new settlers," who were born and raised in North Korea but escaped from the communist nation, find jobs through a new supportive self-employment program.
The microcredit bank will create a tailored loan program for these new settlers, dubbed "H-Hana Loan."
The ministry unveiled the plan to allow North Korean defectors to apply for business loans at a time when lawmakers and the government are dealing with the challenging task of finding a sustainable solution to job instability and the high unemployment of North Korean defectors.
Under the plan, the ministry will shortlist a group of candidates among those who have applied for the loan program and recommend them to the microcredit bank run by Hyundai Motor Group.
The foundation, which was established to help those with bad credit records, will look carefully into the eligibility of the candidate before approving the loans.
The shortlist will be chosen in August and they are required to undergo an educational program where they will learn about how to run a successful business and get other tips for survival for two months. After that, they will get the funds to finance their business in October.
About 20,000 North Korean defectors currently reside in Korea and the number has continued to rise year after year.
As a result the fiscal burden that the government has to shoulder has soared.
An official said on condition of anonymity that the government spends hundreds of millions won to help a North Korean defector adjust to society while staying at the Hanawon, a resettlement center for North Korean defectors, to fully assimilate to the local community.
Once finishing their time at the Hanawon, the new settlers are given public housing with a settlement fee of three million won per person. One million won per family member is added.
For the first six months, they get 420,000 won for living expenses. If they fail to get a job during that period, they can extend the payments until they find employment. New settlers are also entitled to a variety of financial incentives when taking job training programs and being employed in the same workplace for a number of years.
The government has introduced those measures to encourage new settlers to stay at the same job.
Data showed that most North Korean defectors are involved in precarious jobs, leading to high job instability. The majority of them remain unemployed after the initial protection period ends.