KB Kookmin Bank stated on the 3rd that it will launch a unique debt relief initiative valued at 278.5 billion South Korean won, benefiting 12,433 people in financial difficulty.
The debt relief process will involve cutting the principal amount of short- to medium-term overdue loans by as much as 90%, while also canceling long-term delinquent loans. The bank’s objective is not only to address non-performing loans but also to motivate struggling borrowers to rejoin the formal financial system.
Eligible beneficiaries consist of socially disadvantaged groups with loans that have been past due for over five years and amounts of 50 million Korean won or less, along with individuals covered under the Individual Debtor Protection Act. This program also encompasses young people 34 years old or younger, focusing on those struggling with student loans and delayed job placements that have extended their delinquency.
KB Kookmin Bank intends to receive applications until June and implement principal reductions of as much as 90% following an assessment. Significantly, for 2,074 borrowers who have unpaid interest for more than five years, the bank will immediately cancel outstanding debts rather than using statute of limitations exemptions.
In the last three years, KB Kookmin Bank has continuously decreased long-term overdue debts, self-liquidating bonds amounting to 277.9 billion South Korean won. The bank has focused on settling outstanding loans instead of simply prolonging their legal time limits.
A representative from KB Financial Group stated that this initiative is aimed at promoting inclusive finance, helping borrowers who are facing difficulties in making payments, and assisting them in rebuilding their credit to facilitate financial activities. KB Financial Group has committed to investing 1.7 trillion South Korean won into inclusive finance by 2030.
A representative from KB Kookmin Bank mentioned, “This debt relief is more than just settling debts; it seeks to build a base for those in need to get back into economic activities. We will narrow disparities in financial aid and increase real-world support for vulnerable borrowers to meet the bank’s social obligations.”
KB Kookmin Bank also manages the ‘KB Hope Financial Center,’ which connects financial advice with mental health assistance. This facility, launched in Seoul and Incheon last December, has offered loan reorganization and tailored credit guidance to 1,542 individuals who were behind on their payments. The bank intends to extend this service to additional areas during the first half of the year.
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