Revised Enforcement Decree of Microfinance Support Act

FSC Korea News

Published April 6th, 2026

Detected April 8th, 2026

Summary

The Financial Services Commission of Korea approved revisions to the Enforcement Decree of the Microfinance Support Act on April 6, 2026. The revision raises the common microfinance contribution rate for banks from 0.06% to 0.10% and for nonbanks from 0.03% to 0.045% of household loan sizes, generating an additional KRW 197.3 billion annually (KRW 134.5 billion from banks, KRW 62.8 billion from nonbanks). The Korea Inclusive Finance Agency will also be authorized to provide credit guarantees for microloans under the Credit Counseling and Recovery Service program.

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What changed

The revision modifies two key areas of the Microfinance Support Act enforcement decree. First, the common microfinance contribution rates that financial companies pay to KINFA are increased: banks see a 0.04 percentage point increase (0.06% to 0.10%) and nonbanks see a 0.015 percentage point increase (0.03% to 0.045%), totaling KRW 197.3 billion in new annual contributions. Second, the revision establishes KINFA as an authorized credit guarantee provider for CCRS microloans, supplementing the guarantees previously provided only by Seoul Guarantee Insurance.

Financial institutions providing household loans, including commercial banks and nonbank entities (insurance companies, mutual finance institutions, specialized credit finance companies, and savings banks), will face increased contribution obligations effective with this revision. The expanded KINFA funding will increase access to lower-cost microfinance for lower-income individuals and vulnerable groups. Additionally, the CCRS microloan program supply is expected to triple from KRW 120 billion to KRW 420 billion annually, benefiting individuals undergoing debt workout processes.

What to do next

Review and update microfinance contribution calculations for household loan portfolios
Assess impact of increased contribution rates on financial planning
Prepare for expanded credit guarantee arrangements with KINFA for CCRS microloans

Penalties

None stated; non-compliance with contribution requirements would result in regulatory action under the Microfinance Support Act

Source document (simplified)

Press Releases

Revised Rules on Microfinance Support to Strengthen Foundation for Inclusive Finance Assistance Apr 06, 2026
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The Financial Services Commission announced that a revision bill for the Enforcement Decree of the Microfinance Support Act was approved by the government at the cabinet meeting held on April 6.

Under the revised rules, (a) the size of annual microfinance contributions financial companies make to the Korea Inclusive Finance Agency (KINFA) will be expanded to ensure a steady foundation for the supply of microfinance assistance, and (b) a legal foundation will be established enabling the KINFA to provide credit guarantee support for the users of microloan service under the Credit Counseling and Recovery Service (CCRS) program.

Key Revision Details

a) Expanding financial companies’ annual microfinance contribution amounts

Against the backdrop of rising external uncertainties and straining economic conditions, lower-income individuals and vulnerable groups stand at more risk of falling prey to illegal private lending activities, and thus there exists an urgent need to expand the supply of microfinance support. In this regard, the FSC has been seeking to increase the common contribution rate financial companies are subject to when making contributions to the KINFA in relation to the size of their household loans.

This common microfinance contribution rate was set at 0.06 percent for banks and 0.03 percent for nonbanks (insurance, mutual finance, specialized credit finance, and savings banks) in relation to the size of their household loans. This amounted to an annual contribution level of about KRW434.8 billion in total (KRW247.3 billion from banks and KRW187.5 billion from nonbanks).

Under the revised rules, this common microfinance contribution rate will be raised by 0.04 percentage points for banks to 0.1 percent and by 0.015 percentage points for nonbanks to 0.045 percent, which will expand the total amount of annual contributions by about KRW197.3 billion (KRW134.5 billion more from banks and KRW62.8 billion more from nonbanks).

With the availability of additional funding sources for microfinance assistance, there will be greater access to financial services at lower costs for lower-income individuals and vulnerable groups.

b) Establishing a legal foundation for KINFA to provide credit guarantees

Alongside the debt workout assistance, the Credit Counseling and Recovery Service (CCRS) has been operating a microloan program at low interest rates (3 to 4 percent annually) guaranteed by Seoul Guarantee Insurance (SGI) for individuals who are going through a debt workout process. However, due to the prudential management issue at SGI, which is a private financial company, it has remained difficult to actively expand the supply of microloans operated by the CCRS.

In this regard, under the revised rules, the KINFA will be authorized to provide credit guarantees on microloans issued by the CCRS to facilitate an expanded supply of microloan assistance for those who are going through a debt workout process. The availability of credit guarantees from the KINFA in addition to those made available by SGI will help the CCRS to provide low-interest microloans to more individuals.

Based on this, the CCRS plans to significantly expand the supply of microloans by about KRW300 billion annually from KRW120 billion a year previously to KRW420 billion a year. This will help to increase the chances that individuals going through a debt workout process are more likely to complete the program to quickly recover and regain footing financially.

Further Plan

The revised Enforcement Decree of the Microfinance Support Act will take effect on the day of promulgation. The FSC will continue to seek ways to expand the supply of microfinance assistance and lower interest burdens to help improve access to financial services and bring down costs for lower-income individuals and vulnerable groups.