Good morning, fellow Koreans,

Since the 17th of this month, the Government has waged a “war against illicit private loans.”

As soon as the complaint call center opened, it was inundated with frantic phone calls. Already on day one, some 1,500 complaints were filed with the center, which was more than 12 times the usual number. In just 10 days as of yesterday, approximately 13,000 complaints were received.

For this reason, the center extended its office hours from 9 o’clock in the evening to midnight, and it even decided to receive calls on the weekends as well. It is truly heartbreaking when I think about the desperate voices of many low-income people, who have suffered thus far in the dark shadows of private loans.
 

In an effort to prevent the global economic crisis from adding strain to the lives of low-income families, the Government arranged new financial programs designed to help working-class people. They include Miso Finance, Haetsal Loan and Saehuimang holssi Loan. Through these, low-income people and smaller business owners can now take out loans with low interest rates. In addition, the Government has actively supported college students through a new income-contingent loan scheme.

The total amount allocated for such financial programs intended for the working class reaches approximately three trillion won this year. Notably, Miso Finance was talked about even in the G20 Seoul Summit and has been benchmarked by many countries around the world as a successful microfinance program.

These financial programs have helped address the difficulties of low-income people to a certain extent and produced some tangible results. In the process, know-how in running such programs has been accumulated. 

Last month, the Government made public a policy to expand microfinance programs for working-class people, and now it is committed to channeling all its efforts into preventing illegal private loans to help those in even more difficult situations.

There were as many as 2.5 million people who had to take out private loans in the past year. In 2009, in a bid to protect such people in financial difficulties, the Government set a maximum limit for interest rates to be charged by unregistered moneylenders or private lenders at 30 percent per year. Moreover, annual interest rates charged by registered consumer loan companies were limited to 39 percent. Despite such measures, many people are still plagued by illegal murderous usurious loans and loan scams.

The Government is carrying out a special crackdown and will receive complaints until the end of May. Anonymous complaints can also be filed if informers are afraid of revenge.

If victims report their cases, they would be able to receive counseling services tailored to each different circumstance. Then, agencies and ministries concerned will join forces and strive to come up with remedies.

Consequently, those who had to shoulder high illegal interest rates will be able to pay normal rates. In addition, designated counselors will provide help for those who meet certain criteria by explaining to them how to use microcredit services or financial services of established institutions.

The following is what graduate school student Lee A-yeong (25), who was able to escape the pain of a private loan thanks to a microfinance program, had to say:

“My private loan of 5 million won snowballed so that the burden on me as a student was beyond description. Among other things, telephone calls urging payment of the overdue loan bothered me the most. Thanks to the Bakkweodeurim Loan, however, I am now able to make payments on the principal and the lowered interest while working a part-time job in accordance with a well-planned scheme."
 

Necessary legal services are also being provided. Those who had to pay interest exceeding the legal rate will be able to receive assistance in filing lawsuits to get the excess back.

On receiving complaints on illegal practices, the prosecution and the special investigation team of the police will carry out extensive investigations and punish the perpetrators. They will also root out organized crime rings that are illegally providing private loans and infringing upon human rights with threats and violence. This is the very reason why the prosecution and police have jointly launched a special crackdown.

Victims who hesitated to report for fear of revenge are gradually taking courage and filing complaints.

The following is what Yang Il-nam, counselor at the complaint call center dealing with illegal private loans, had to say. He is the director of the Micro-credit Coordination Team at the Micro-credit Support Office of the Financial Supervisory Service.

“A woman in her 50s who is running a store at a provincial traditional market telephoned and said that her first private loan amounting to 2 million won rose to a 200 million-won debt. At that market, there are scores of merchants who are now in a similar situation. They are not able to report their cases to the police out of fear. She repeated her entreaties to punish heinous loan sharks without fail this time.”

Previous Administrations launched crackdowns, but the effects were fleeting, and the techniques of the illegal usurers have become even craftier. Therefore, the Government will mobilize all necessary means this time to chase them to the end and root them out.

At the same time, the Government will try not to adversely affect legitimate private lenders in an effort to prevent giving low-income individuals using them greater aggravation.

Along with school violence, illegal usury is one of the most serious types of violence undermining our society. Even after the special crackdown period ends at the end of May, the Government will continue to receive citizens’ complaints and maintain the current enforcement system on a permanent basis. In this way, the illegal usurious practices will be fundamentally resolved.

This is the way for the Government to keep its promise to help relieve the pain of low-income people by providing needed help. I hope that the nation as a whole will actively cooperate and pay attention to this matter.

My fellow Koreans,

The 18th National Assembly is in its final stretch. It is, however, regrettable that the Assembly has not yet been able to pass critical, urgent bills affecting the everyday lives of the people. They include bills to allow the police to track the locations of 112 emergency callers and to build emergency trauma centers as well as a special act on punishing sex offenders. The ruling and opposition parties have already agreed to pass the amendment to the Pharmaceutical Affairs Act as well as the carbon emission rights trading bill, but they are yet to be acted on.

The reform bills concerning people’s everyday lives are critical pending issues going beyond the interests of the political parties. I earnestly plead the National Assembly to hold an extraordinary session and pass them before the 18th Assembly expires.

Over the weekend, the Government convened a full-day fiscal strategy meeting, prepared guidelines for next year’s budget and examined the middle and long-range directions of the national economy.

The Government’s impending task is to stabilize the people’s everyday lives based on fiscal soundness, while fostering growth engines for the future.

As I watch the fiscal crisis Europe is currently experiencing, I will strive, along with my Administration, to carry out state affairs without any wavering. This is to make sure that the coming generations will not be burdened by the wrong decisions that we might make today.

In the month of May when nature becomes greener, I wish every one of you the blessing of new hope.

Thank you very much.