KB Kookmin Bank is moving to support sole proprietors facing high interest-rate burdens.
KB Kookmin Bank said on May 10 it will implement this month a financial inclusion programme that uses interest amounts above an annual 5 percent on sole proprietor loans for repayment of loan principal.
The programme is part of the "KB Kookmin Happy Hope Project". When a sole proprietor extends an existing business loan and the applied rate exceeds 5 percent a year, the interest amount corresponding to the excess portion, up to 4 percentage points, is automatically used to repay the loan principal.
This is expected to reduce both the outstanding loan balance and subsequent interest burdens, easing financing costs for sole proprietors. If principal is repaid using excess interest payments, early repayment fees are also waived.
Eligible borrowers are low-credit sole proprietors holding won-denominated loans with annual rates above 5 percent. Some industries, including real estate-related businesses, and delinquent customers are excluded.
A KB Kookmin Bank official said the bank expects more than 10,000 sole proprietors to benefit, adding it will continue to expand inclusive finance for vulnerable groups.
Lee Ji-young
ljy@d-today.co.kr