The South Korean government has implemented a comprehensive one-stop support system to address the persistent issue of illegal private lending. This initiative was announced following the second cross-government task force meeting on eradicating illegal private finance, chaired by Yoon Chang-ryeol, Chief of the Office for Government Policy Coordination. The policy aims to provide victims with immediate access to safety measures, legal and economic support, and daily life recovery through a single report. Despite previous efforts, the frequency and severity of illegal lending cases remain high, prompting the government to strengthen its response.
The new system directly impacts victims of illegal private lending, particularly those from low-credit and financially vulnerable groups. Victims can now visit any of the 50 nationwide People’s Finance Integrated Support Centers starting next month to request dedicated support staff from the Credit Recovery Committee. The Financial Supervisory Service will analyze submitted reports and coordinate necessary relief actions with relevant agencies, even without additional applications from victims. Agencies such as the National Police Agency, Korea Inclusive Finance Agency, and Korea Legal Aid Corporation will process victim relief measures under the new system.
Implementation of the one-stop support system begins in early 2024, with inter-agency agreements established to ensure smooth operation. Key changes include lowering the interest rate for the Illegal Private Lending Prevention Loan from 15.9% to 5–6% and expanding the loan supply to KRW 200 billion this year. The special guarantee for low-credit borrowers under the Sunshine Loan program will also see its interest rate reduced from 15.9% to 12.5%. The government will enhance monitoring of disguised illegal lenders and enforce stricter advertising regulations to prevent further victimization.
Frequently asked questions include how victims can access support and what measures are in place for rapid relief. Victims need only file a single report to initiate all government services, including debt collection suspension and legal assistance. The system also mandates that online platforms implement self-regulation to block illegal collection activities. Additionally, the government will freeze accounts used for illegal lending and establish legal grounds for direct victim compensation from confiscated criminal proceeds.
The South Korean government’s one-stop support system for illegal private lending victims is a substantial policy improvement. By consolidating reporting and support services, the initiative reduces barriers for victims and ensures faster, more coordinated relief. Lowering interest rates and expanding loan programs further protect financially vulnerable individuals from predatory lending. The policy’s emphasis on inter-agency cooperation and enhanced oversight is likely to increase the effectiveness of crime prevention and victim recovery.