FSC launches inclusive finance task force to reform Korea's credit system
Updated
Updated · The Korea JoongAng Daily · May 10
FSC launches inclusive finance task force to reform Korea's credit system
9 articles · Updated · The Korea JoongAng Daily · May 10
The move follows presidential policy chief Kim Yong-beom's Facebook posts this month calling the system "cruel" and saying banks shut mid-to-low score borrowers out of mainstream lending.
Kim, a former FSC vice chairman who helped design the system, argued current scores rely too heavily on past records and fail to reflect repayment capacity, especially for self-employed and temporary workers.
Researchers say Korea's credit distribution shows a hollowed-out middle, but critics note capital rules and pressure over loan-deposit spreads also discourage banks from lending to riskier borrowers.
Can Korea mandate 'inclusive finance' for banks without risking the stability they were built to protect?
With its own architect calling it 'cruel,' can South Korea successfully reform its broken credit system?
Overhauling South Korea’s Credit System: 2026 Reforms to End the “Invisible Class System”
Overview
South Korea’s Financial Services Commission is launching a major reform to overhaul the nation’s credit system, aiming to break down the 'invisible class system' created by traditional credit assessments. This system has long marginalized people with mid- and low-credit scores, limiting their access to essential financial services and deepening economic inequality. As a result, many are trapped in cycles of limited opportunity, unable to secure loans for housing, education, or business. The reform seeks to address these issues by making credit more accessible and ensuring fairer opportunities for all citizens.