Starting on the 20th, at 20 post offices nationwide located in areas without bank branches, such as Imsil in North Jeolla and Bonghwa in North Gyeongsang, individuals will be able to apply for unsecured personal loans and policy loans from the four major banks. In addition, regional banks and internet-only banks will join hands to launch joint lending for local SMEs and microbusiness owners.

Korea Post on the 9th announced an ‘operational plan for a pilot bank agency program’ to improve access for residents in financially underserved areas at the ‘6th Inclusive Finance Grand Transition Meeting and Regional Finance Roundtable’ held at the Jeonju office of the SMEs and Startups Agency in North Jeolla, chaired by Financial Services Commission Chairman Lee Eok-won.

The bank agency business is a system that allows third-party institutions such as post offices to perform core banking functions such as deposits and loans on behalf of banks. It was first introduced last year, and preparations have been underway for a pilot run centered on post offices. The aim is to address the inconveniences caused by the decline in bank branches and, in particular, the financial exclusion of digitally vulnerable groups that is rapidly increasing in the provinces.

According to the Korea Institute of Finance 2024 report 'Analysis and Implications of the Distribution of Domestic Bank Branches', in major cities such as Seoul and Busan, bank branches are located on average within a few hundred ｍ of residences; however, in small and midsize cities or county-level areas in the provinces, where the proportion of older adults is high, people must travel an average of 4.8 ㎞ to conduct banking in person.

The pilot will begin on the 20th at 20 county-level post offices nationwide. The locations include Goseong·Changnyeong·Hadong in South Gyeongsang, Cheongyang·Taean·Danyang·Goesan in Chungcheong, Gurye·Damyang·Yeonggwang·Hampyeong in South Jeolla, Bonghwa·Cheongdo·Seongju in North Gyeongsang, Imsil·Sunchang·Gochang in North Jeolla, and Pyeongchang·Hwacheon·Hoengseong in Gangwon. The Financial Services Commission stated, “Selections were made considering factors such as the share of bank branches in the area and whether it is a depopulating region.”

The participating banks are four: KB Kookmin·Shinhan·Woori·Hana. Each bank will consign one unsecured personal loan product and one policy loan product (New Hope Seed) to post offices for sale. The loan limit is up to $75,000 (100,000,000 KRW). Without visiting each bank separately, customers can check at the post office whether they are eligible for each product and the terms.

The Financial Services Commission stated, “Consumers can enjoy an effect similar to using a ‘loan comparison platform’ through the post office,” and added, “With a single visit, they can consult·apply for eight loan products from the four major banks.”

Customers who apply for loans at post office counters will also receive additional benefits. KB Kookmin·Woori·Hana Bank will offer a preferential rate of 0.2 percentage points, while Shinhan Bank plans to waive early repayment fees for unsecured personal loans.

Meanwhile, as part of a plan to revitalize regional finance, KakaoBank announced the ‘operating plan for joint loans to SMEs and sole proprietors by regional banks and internet banks’ that it is pursuing with Busan Bank. The plan is to source customers through the KakaoBank app and to split screening·funding with Busan Bank to execute the loans.

NH Financial Group Holdings also announced on the day the ‘plan to strengthen inclusive finance’ to provide a total of $11,475,000,000 (15,300,000,000,000 KRW) in financing over the next five years for microbusiness owners·vulnerable groups. It plans to establish in the fourth quarter of this year the ‘NH Smile Microfinance Foundation’ with a total size of $75,000,000 (100,000,000,000 KRW) to build a foundation for supplying microfinance to vulnerable groups in local communities.