The Samsung Group, one of Korea’s biggest conglomerate, said on Tuesday that it plans to double its disbursement of microcredit loans to 60 billion won ($51.2 million) in South Korea this year. Launched in December 2009, Samsung Smile Microcredit Bank (SMB) is a government led microfinance program also known by the name of “Miso Microcredit Foundation”. It is supported by big private sector players as part of the government’s policy to aid low income earners
Samsung has set itself a target of 60 billion Won in microcredit loans for this year, up from its previous estimate of 30 billion. The funds for disbursement are expected to come from Samsung Electronics and Samsung Life, who plan to commit 30 billion won every year over the next 10 years for the state sponsored microcredit program.
Samsung Smile Microcredit Bank has so far extended 1.7 billion won in loans till the end of July, which falls far short of its earlier target. Samsung has extended an average of 9 million won in loans per successful applicant in South Korea.
The government has recently eased conditions for microcredit loans, allowing some of those with credit ratings of 5 grade or 6 grade to be eligible for the scheme. Previously, those with credit ratings of 7 grade or lower were eligible for microcredit loans at interest rates which ranged from 2 percent to 4.5 percent. Samsung Smile Microcredit Bank currently has more than 50 Branches in South Korea.