First payments due Oct. 12
Up to 300,000 won per quarter
Shinhan Financial Group launched a program Thursday to refund a portion of loan repayments to young customers who have been paying back their debt on time.
Shinhan Financial will begin accepting applications for the "asset-building support fund" through the Shinhan Microfinance Foundation starting Friday. It marks the first time a financial institution in South Korea has offered a cash-back scheme for young borrowers who repay consistently.
The program draws on 20 billion won of the 100 billion won ($73 million) that Shinhan Financial contributed to the Microfinance Foundation in March. The foundation provides policy-backed microloans at low interest rates to people with limited access to mainstream banking.
The initiative aims to encourage young borrowers to keep up with repayments while helping them build financial independence. Shinhan Financial expects about 10,000 people to benefit over roughly eight years, until the funds are exhausted. The first payments will be made on Oct. 12.
Eligible applicants are customers who took out a "Youth Future Bridge" or "Youth Operating Fund" loan from the Shinhan Microfinance Foundation on or after April 1 this year and have been repaying without any overdue payments. The foundation will check for delinquencies at the end of each quarter and pay up to 300,000 won per disbursement, for a maximum of 10 payments totaling 3 million won. Payments are due on the 10th of the month following each quarter's close, with disbursement pushed to the next business day if that date falls on a holiday.
The current application round covers customers selected from among 568 young borrowers who took out loans between April and June this year. Applicants can apply through the "Asset-Building Support Fund Application" page on the Shinhan Microfinance Foundation's website. After a verification process, the funds will be deposited into the registered account.
The Shinhan Microfinance Foundation will operate a dedicated call center for the asset-building support fund on a temporary basis through March 31, 2027. Starting Sept. 30, borrowers will also be able to check the status of their payments through the "Asset Building Support — My Page" menu on the foundation's website.
"Many young people who borrow through the Shinhan Microfinance Foundation struggle to meet the requirements of mainstream banks," said Shinhan Financial Group Chairman Jin Ok-dong. "We want to reward those who work hard to pay back their loans by returning the fruits of their efforts, so they can build their own assets."
forest@heraldcorp.com
