More than half of the loans extended under Korea's Worker Sunshine Loan program, designed to improve credit access for low-income workers with weak credit, went to borrowers with credit scores above 700, data showed. Their share rose to 51% from about 20% five years earlier, while the share going to borrowers scoring 600 or below plunged to 8.5% from 35.5%.
Borrowers with Korea Credit Bureau scores of 701 or higher accounted for 51.0% of Worker Sunshine Loan funds extended last year, according to the National Assembly Budget Office on the 6th. That marks a 30.6 percentage point increase from 20.4% in 2021. The amount extended to that group grew to 1.7641 trillion won ($1.2 billion) from 706 billion won over the same period.
By contrast, the share going to borrowers with scores of 600 or below fell 27.0 percentage points to 8.5% last year from 35.5% in 2021. The amount dropped to 292.2 billion won from 1.2281 trillion won. Lending to the under-600 group declined by 935.9 billion won, while lending to the above-700 group rose by 1.0581 trillion won, leaving the two shifts comparable in scale.
The overall size of the program did not expand. Annual lending under the Worker Sunshine Loan stood at 3.4577 trillion won last year, little changed from 3.4597 trillion won in 2021.
The Worker Sunshine Loan is a government-backed financial product for low-income workers with weak credit, under which the Korea Inclusive Finance Agency provides guarantees and financial firms extend the loans, aimed at improving credit access for low-income workers with weak credit who struggle to borrow from mainstream lenders. From this year, the program has been reorganized as the "General Sunshine Loan." The budget office said policy effectiveness should not be judged on lending figures by credit score alone, and that income levels should be examined as well. One financial industry official said authorities should check which borrowers are actually receiving the funds and whether the program is leading to better access to financial services.
