Shinhan Financial Group said on Tuesday its major affiliates will make an additional total contribution of 100 billion won to the Shinhan Smile Microfinance Foundation and expand participation in policy programmes for low-income finance that include incentives for faithful repayment, targeting young people and vulnerable groups in provincial areas.

The contribution is aimed at strengthening the foundation, which oversees the group’s low-income finance, into a group-level execution platform to support self-reliance and future preparation for young people and vulnerable groups in provincial areas.

Shinhan plans, based on an expanded funding base, to take part in policy finance programmes of the Korea Inclusive Finance Agency for young people and vulnerable groups in provincial areas. It also plans to gradually expand an incentive model that links faithful repayment after lending to asset building.

Shinhan is also reviewing an incentive model for borrowers who faithfully repay Smile Microfinance loans. Under the model, part of the amount repaid would be used as matching funds to save into the Youth First Savings product or to invest in the Korea Inclusive Growth Fund, which is scheduled to launch in June.

Shinhan said it plans to gradually expand the scope of group-level inclusive finance projects based on additional Smile Microfinance contributions and linkages with policy finance.

It also plans to establish an execution structure that runs from “lending–repayment–asset building–rebound” by linking to start-up support loans following the building of a “comprehensive support system across the full cycle of start-ups for young people and provincial areas.”

Jin Ok-dong (진옥동), chairman of Shinhan Financial Group, said the contribution would be a catalyst for the foundation to establish itself as an execution hub for low-income finance for young people and vulnerable groups in provincial areas. “We will continue to strengthen inclusive finance as part of responsible management so that faithful use of financial services can lead to self-reliance and preparation for the future,” he said.