The Korea Inclusive Finance Agency (KINFA) and the ruling Democratic Party have launched a public discussion on establishing financial basic rights to improve financial access for underserved populations.
KINFA President Kim Eun-kyung held a policy forum with the Democratic Party at the National Assembly in Yeouido on Wednesday, stating that "vulnerable groups show a clear tendency to be excluded from financial markets." She added that "this limits opportunities across all aspects of life and deepens inequality." Kim emphasized that "the issue of financial access must be understood as a matter of guaranteeing basic rights for which the state is responsible."
Participants at the forum diagnosed that resolving financial exclusion must precede the substantive guarantee of the constitutional rights to pursue happiness, freedom of residence and movement, and freedom of occupation, and that introducing financial basic rights could address this issue. Jeon Hak-seon, a professor at Hankuk University of Foreign Studies, said, "Basic rights related to financial transactions that are essential to economic activity can collectively be viewed as financial basic rights." He added, "Financial basic rights are needed to protect consumer rights of citizens from financial companies."
Analysis also emerged suggesting that financial basic rights could contribute to economic growth. Kang Kyung-hoon, a professor of business administration at Dongguk University, argued, "In an environment of fierce technological innovation competition, financial basic rights go beyond protecting the socially disadvantaged — they are a key mechanism for maintaining the innovation ecosystem and ensuring sustainable growth." He continued, "When universal access to financial services becomes possible, investment in human capital expands and labor productivity rises, which can drive economic growth."
Observations were also made that introducing financial basic rights could become a variable in monetary policy decisions. Kim Young-il, head of the NICE Research Center, suggested that if financial basic rights are introduced, the Bank of Korea could review financial costs for low-income groups when setting the base rate. Moderator Kim Ja-bong, senior research fellow at the Korea Institute of Finance, added, "This means adding a policy objective to the central bank's interest rate decisions and redoing the entire cost-benefit analysis." He continued, "With 1.85 million financially vulnerable people, considering this could produce significant results."
Recommendations on microfinance policy were also presented. Han Jae-joon, a professor at Inha University, said of KINFA, "The current system has a stronger project-based character than a rights-guaranteeing one." He added, "It needs to evolve from a selective support institution into a predictable rights-guaranteeing institution."
Democratic Party lawmaker Min Byoung-dug, who hosted the forum, said, "People with more assets and income can borrow large sums at relatively low rates, but the financially underserved are excluded — that is the reality." He added, "To achieve the life guaranteed by the Constitution, we must resolve the issue of financial exclusion."
