Woori Bank said it will expand its "interest rate cap" system, which limits personal credit loan rates to within 7 percent a year, to include new loans from March 23. It also said it will launch the "Woori WON Dream living-expense loan" product to ease the financial burden on middle- to low-credit borrowers.

The expanded system and product launch are part of Woori Financial Group's "Future Shared Growth Project" to broaden inclusive finance, and were prepared to support vulnerable groups facing rising financial burdens due to an economic slowdown and higher living costs.

Woori Bank has applied the 7 percent interest rate cap to customers who extend or renew personal credit loans. The latest move expands its scope to new personal credit loans.

Under the plan, consumers who have used Woori Bank for deposits and savings, credit cards or subscription savings for at least 1 year and take out a new personal credit loan will have the rate capped at no more than 7 percent a year for up to 1 year, up to 1 time.

Woori Bank expects the cap benefit to apply to more than 10,000 loans. It sees the measure helping it steadily manage customers' financial cost burdens even as interest rates trend higher.

Vulnerable borrowers to get Woori WON Dream living-expense loan

Along with the expansion, it will also launch the "Woori WON Dream living-expense loan", an inclusive finance product to support emergency living-stability funds for low-income vulnerable groups.

The product targets wage earners with annual income of 25 million won or less, as well as non-wage workers such as freelancers and homemakers. It uses an alternative credit evaluation that reflects a range of information including financial, telecommunications and small-value payments, and expands the applicable credit band to as low as CB grade 8.

It is designed so customers with insufficient documented income can also apply. It offers loans of up to 10 million won and applies rates starting in the high 4 percent range a year, while capping the maximum rate to within 7 percent a year. It also introduces an instalment repayment structure of up to 10 years, including a 3-year grace period, to reduce repayment burdens.

Preferential rates are also offered to inclusive finance beneficiaries such as young people, older people, people with disabilities and basic livelihood security recipients. The product can be applied for non-face-to-face through Woori Bank's mobile app, WON Banking.

Lee Jung-ho (이정호), deputy head of Woori Bank's retail credit loan products team, said the expanded rate cap and the living-expense loan launch are inclusive finance policies aimed at improving financial access for financially vulnerable groups and easing interest burdens. He said the group will expand various support measures through Woori Financial Group's "Future Shared Growth Project" so finance can serve as a social safety net.