Helping handPresident-elect Lee Myung-bak’s pledge to rescue people who are less bankable is taking shape.
When it met with the presidential transition team, the Financial Supervisory Commission explained ways to redeem those who cannot take out loans from banks due to bad credit records.
The details are not decided, but the plans being discussed are to eliminate bad credit records and restructure debt using public funds.
Deleting bad credit records allows those with poor credit to take out loans from financial institutions.
For those who took out loans from private lenders, the government will form a credit recovery fund of 10 trillion won ($10.6 billion) and swap the high-interest loans with more affordable ones.
It is welcome news that the new administration intends to help people who are less bankable and have economic difficulties.
There are 7.2 million people in the country with credit grades of between seven and 10, who are unable to take out loans from banks.
Among them, 2.4 million people have less than 5 million won in debt.
If 20 percent of the economically active population in the country is unable to lead a normal economic life because of debt, society cannot be considered healthy.
President-elect Lee said if the abnormal situation is not improved, the economy will not recover its strength.
That is right.
The question is how to keep from rewarding negligence in the process of redeeming credit delinquents.
The elimination of bad credit records should be a one-time deal.
Credit records are the basis of credit order, and if the order collapses, the stability of economic activities will be jeopardized.
Those whose credit records will be deleted should be reminded that this is the last chance.
This also applies to restructuring debt.
Rather than cancelling debt, the duration for repayment needs to be extended and interest rates should be lowered so that credit delinquents can become economically self-sufficient.
Since tax money is being used to ease the debt burden, those whose debt is restructured must repay what they are given.
We need to make sure that this is done. Otherwise, it will be impossible for the economy to function normally.