In line with the government's push for inclusive finance, KB Financial Group is accelerating efforts to resolve long-term delinquencies among vulnerable borrowers. Rather than simply providing temporary financial relief, the focus is on breaking the cycle of debt for those who have lost their ability to repay and helping them return to economic activity.
As of June 18, the financial sector reports that KB Financial's inclusive finance strategy is evolving to not only reduce the debt burden of vulnerable borrowers but also to support credit recovery and reintegration into the formal financial system. This approach combines the write-off of long-term overdue loans, special debt relief, credit counseling, and tailored support for small businesses to assist financially vulnerable groups in regaining stability.
KB Kookmin Bank plans to implement a special debt relief program this year for 12,433 financially vulnerable individuals, amounting to a total of 278.5 billion won. The program targets those with loans that have been overdue for more than five years and with principal amounts under 50 million won, including social vulnerable groups and borrowers eligible for debt adjustment under the Personal Debt Adjustment Act. Young adults under 34, who have faced long-term delinquencies due to student loans and employment delays, are also included. Applications will be accepted until the end of this month, with a review process to potentially reduce principal amounts by up to 90%.
For 2,074 borrowers with overdue interest exceeding five years, KB Kookmin Bank will support their recovery by immediately writing off their remaining debts instead of allowing the statute of limitations to expire.
The bank is also accelerating the write-off of long-term overdue loans. Over the past three years, KB Kookmin Bank has written off 277.9 billion won in loans. This year, it has already written off 33.5 billion won in long-term overdue loans as of March, with plans to write off an additional 100 billion won in loans that are nearing the statute of limitations by the end of this month.
A support system has been established to assist borrowers in returning to the formal financial sector after debt adjustment. A notable example is the KB Hope Financial Center, which provides debt adjustment and credit counseling services to borrowers who have regained their credit status, enabling them to continue their economic activities.
Additionally, KB Kookmin Bank contributed 56.2 billion won to the New Leap Fund last year to support credit recovery for vulnerable borrowers, the largest contribution among participating financial institutions. The New Leap Fund is a program that purchases and writes off personal debts under 50 million won that have been overdue for more than seven years or facilitates debt adjustments.
Beyond debt relief, KB Kookmin Bank continues to provide direct financial support to financially vulnerable groups, including small businesses. From February 2024 to the end of last year, the bank invested 372.1 billion won in consumer finance support, the largest amount in the banking sector. Through the 'KB Small Business Support Project,' it is also providing tailored support to alleviate financial burdens and enhance management competitiveness. The 'Visiting KB Small Business Mentoring School,' which has been running since 2019, has expanded its support from 50 to 100 businesses and has transitioned from a semi-annual program to a year-round initiative.
A KB Kookmin Bank official stated, "We are focused on creating a foundation for vulnerable borrowers to participate in economic activities again, going beyond simple debt relief. We will continue to reduce financial support blind spots and expand practical inclusive finance initiatives."
* This article has been translated by AI.
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