<Anchor> The



government and the ruling party have decided to lower the legal maximum interest rate, which is currently 24% a year, to 20% a year and 4% points.

The intention is to reduce the interest burden on the common people, but there are also concerns that the vulnerable will be pushed back to illegal private finance.



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, as it was pointed out that further cuts are 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: (Loan industry) applies the highest legal interest rate at a time, so it is a reality that it is impossible to reduce the burden on these people (low-



credit

common people) without a reduction in the highest rate.

Of the 2.39 million people who received payments, the interest burden of 2.08 million people, or 87%, is expected to decrease by 483 billion won each year.



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



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



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.



[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 (good thing.)] The



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