<Anchor> The



government and the ruling party have decided to lower the legal maximum interest rate, which is currently 24% a year, to 20%.

It is intended to ease the interest burden of the common people, but in that case, there are concerns that people with low credit will have no choice but to seek illegal loans because they will not be able to lend money.



This is Yoo Deok-ki.



<Reporter> The



maximum interest rate for the loan business was gradually cut from 66% per annum in 2002 and dropped to 24% in 2018.



The government and the ruling party decided to lower the legal maximum interest rate by 4 percentage points to 20% per annum due to the recent criticism that a further cut is necessary as the low interest rate trend continues.



It is expected to be implemented in the second half of next year.



[Eun Seong-su/Chairman of the Financial Services Commission: Since (loan industry) applies the legal maximum interest rate at a time, it is a reality that it is impossible to reduce the burden of (low



credit

ordinary people) without a reduction in the maximum interest rate.]

Of the 2.39 million people, the interest burden of 2.08 million people, or 87%, is expected to be reduced by KRW 488.3 billion annually.



However, the government's judgment is that the remaining 13% could be blocked from private loans, and 39,000 people with lower credit could be pushed to illegal private finance.



This is because, when the maximum interest rate drops, low-credit lenders refuse to extend low-credit loans and maturities.



Even when the highest interest rate was lowered in 2018, both the number of new lenders and the amount of loans were cut in half.



The loan industry insists that the business right itself is about to collapse.



[Professor Sang-Bong Kim/Hansung University Department of Economics: When the lender (loan) disappears, these people can be pushed out to illegal private finance or to private transactions.

Good policy is good, but to those who have it relatively (which is good.)] The



government has announced that it will provide more than 270 billion won in additional policy products such as Sunshine Loan for the financially vulnerable.



(Video coverage: Park Jin-ho, video editing: Park Jeong-sam, CG: Choi Haneul, Kang Kyung-rim)