November 29, 2024

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Hana Financial Group Chairman Ham Young-joo promotes its new 26 trillion won ($19 million) financial support program for the socially vulnerable population in this photo released Sunday. (Hana Financial Group)

South Korea’s Hana Financial Group said Sunday it plans to launch a financial aid program worth 26 trillion won ($19 billion) this month that will benefit some 700,000 vulnerable members of society annually.

The program named "All Happiness Connected in Hana Finance" will focus on loan extension and cutting back interest rates for 350,000 small business owners, 90,000 mortgage borrowers and 250,000 financially vulnerable members of the population, including customers in their 20s and 30s.

With the government’s COVID-19 loan maturity extension program for small businesses and the self-employed set to end in September, Hana’s new program will allow an additional extension for the group, currently struggling under the influence of inflation and rising interest rates. The Korean government first launched measures to extend loan principal maturity and defer repayment of principal and interest for small businesses affected by the pandemic in April 2020.

The support measures for small businesses include a maximum 1 percentage point interest rate cut for those with loans with an annual percentage rate above 7 percent. Additionally, small business owners who borrowed from non-bank financiers will be able to replace their existing loans with a more “low-risk” product offered by Hana.

Hana’s credit card issuer Hana Card will take part in the project by offering a 1 percentage point rate cut for small business owners with credit card debts and who can prove that their sales dropped 30 percent during the pandemic.

From October, the financial giant’s flagship commercial lender Hana Bank will start providing a 0.7 percentage point rate cut benefit for young customers in their 20s and 30s who are either preparing to launch their own business or are within the first seven years of operating a business.

For senior citizens, including benefactors of the basic state pension, Hana Bank will start offering a prime rate savings account with a relatively high yield from Sept. 17. It will upgrade its automatic teller machine system to better cater to its senior customers and establish a senior culture center by the end of the year to provide digital and financial education for the elderly.

The commercial lender’s current financially vulnerable customers with stable loan repayment records will receive additional interest rate benefits as well.

In line with the new program, Hana plans spend an additional 1 trillion won in connecting job seekers with internship programs at businesses deemed socially innovative, financially supporting young entrepreneurs and providing education for early retirees seeking to return to work. Single mothers and youths -- who are from either low-income families or on the verge of aging out of the foster-care system -- will receive support, which will help them gain “financial independence in society,” the firm said.

“The financial sector must stand at the front line when supporting society’s most vulnerable population, and pave the way for universal growth when the economy is struggling,” Hana Financial Group Chairman Ham Young-joo said in a statement.

“Hana Financial Group will make efforts to change society by helping the vulnerable with real financial support that could touch the hearts of our customers.”

By Jung Min-kyung (mkjung@heraldcorp.com)