Nonprofit Opens Reporting Channel for Financial Inclusion Complaints

The nonprofit organization People Living Together has opened a reporting channel to collect cases of inconvenience and unfair treatment experienced by financially underserved groups when applying for or using government-backed microfinance products, such as illegal private lending prevention loans, New Hope Holssi, and Sunshine Loan. The aim is to reflect voices from the field to uncover gaps in the system and prepare effective improvement measures, as the government and the financial sector accelerate efforts to expand financial inclusion.

According to the financial industry on the 28th, People Living Together posted a pop-up titled "Financial Inclusion: We Await Your Voice" on its website the previous day and began collecting cases of disadvantage and opinions on system improvement.

The reporting covers inconveniences that occur during the application or use of various loans targeting financially vulnerable groups, including youth, the elderly, and small business owners, as well as illegal private lending prevention loans, New Hope Holssi, and Sunshine Loan. People can report cases where they were denied a loan application without any particular reason or were unable to use a product despite meeting the eligibility requirements. Cases where applicants gave up due to excessive document submission and complicated procedures, or experienced unkind or discriminatory treatment from financial company staff, are also included. Cases where people were driven to illegal private lending because they could not access institutional finance, or gave up because a product's application conditions and procedures were overly complex, are also subject to reporting.

People Living Together established the reporting channel because, although support products targeting youth, pension recipients, and low-income and low-credit individuals are being launched one after another, in practice a considerable number of cases arise where loans are rejected or applicants are excluded from support based on financial companies' own screening or detailed eligibility criteria.

People Living Together plans to review the submitted content and then verify the facts with the cooperation of the relevant financial companies and institutions. It will then analyze the cases to prepare measures to improve financial company services and protect financially vulnerable groups, and will recommend system improvements to the government and relevant agencies. When results of the improvements are produced, the organization plans to also inform the people who reported the cases.

People Living Together is a nonprofit organization that has provided interest-free, collateral-free, and guarantee-free small loans since 2012 to ensure the basic financial rights of low-income and low-credit individuals who have been denied loans by institutional finance. Without a separate credit check, it examines applicants' circumstances and the intended use of funds to lend an average of 440,000 won and up to 3 million won. As of May this year, cumulative users number about 10,700, the loan amount stands at 4.82 billion won, and the repayment rate is around 90 percent. Loan funds are raised through donations and repayments made by existing users.

Lee Chang-ho, head of People Living Together, said, "Only by listening to the diverse voices from the field can we create effective financial inclusion policies." He added, "I hope interest-free loans and this campaign will serve as a stepping stone that helps financially underserved groups get back on their feet and return to institutional finance."