Smile Microcredit Bank (SMB), the state-run South Korean microfinance bank, announced a comprehensive restructuring of their loan practices following successful advocacy to alter key pieces of government policy. The Financial Services Commission (FSC), South Korea’s financial policy body, reduced the cash holdings equivalent from 50 percent to 30 percent for loans up to KRW 20 million (USD 17,600). It also halved the required time of pre-loan operation from two years to one [1].
The FSC also announced that it would allow SMB to waive or shorten the requirement that borrowers of KRW 5 million (USD 4,230) or more meet with loan consultants three times. SMB has identified this loan amount as one of their most popular.
SMB will also be expanding its traditional outdoor market loan program, where no-interest loans of KRW 100 million (USD 83,700) are made to a merchant committee for on-lending to merchants at 4.5 percent annual interest.
SMB was founded in December 2009 and has issued KRW 5 billion (USD 4.19 million) of loans to 953 borrowers [1, 2].
By Matthew Castner, Research Assistant
About Smile Microfinance Bank (SMB):
Established in December 2009, the Smile Microcredit Bank (SMB) is a state-led program which provides unsecured loans to low-income households through partnerships with the private sector. SMB has issued KRW 5 billion (USD 4.19 million) of loans to 953 borrowers.
Additional Resources
[1] “Microcredit conditions to be eased,” May 17, 2010, http://joongangdaily.joins.com/article/view.asp?aid=2920539
[2] “MICROCAPITAL BRIEF: Korean Microfinance Program, Smile Microcredit Banks (aka “Miso Microcredit Foundation”) Stymied by Credit Rules,” by Hio Kyeng Lee, January 19, 2010, https://www.microcapital.org/microcapital-brief-korean-microfinance-program-smile-microcredit-banks-aka-miso-microcredit-foundation-stymied-by-credit-rules/
MicroCapital’s Microfinance Universe profile: Smile Microcredit Bank: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Smile+Microcredit+Bank+%28SMB%29
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/
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