Shinhan Financial to Write Off $500 Million in Overdue Debts, Boost Inclusive Finance

Shinhan Financial Group is launching a significant "Inclusive Finance 2.0 ON" project, committing 5 trillion won to support vulnerable economic groups. A key component of this initiative is the planned write-off of 500 billion won in long-term overdue debts throughout the year. This move aims to alleviate the financial burden on individuals struggling with past financial difficulties.

The group's affiliated banks, credit card company, and savings bank will begin by writing off 330 billion won in overdue debts in the first half of the year. By the end of the year, the total write-off will reach 500 billion won, including debts whose statute of limitations is nearing expiration. Shinhan Bank will cancel 120 billion won in long-term overdue debts, while Shinhan Card will address 150 billion won in long-term overdue debts, specifically those of deceased individuals or debts exceeding 50 million won that were excluded from other support programs.

Beyond debt relief, Shinhan Financial is accelerating its inclusive finance supply. The group aims to achieve its annual target of 3 trillion won early and will bring forward 1.5 trillion won from next year's plan, totaling 4.5 trillion won to be supplied this year. This funding will be allocated across various support areas: 2.9 trillion won for microfinance, including mid-rate loans; 1.45 trillion won for small business owners; and 150 billion won for programs like Misofinance and expanded support for mutual repayment loans.

Shinhan Financial is also innovating its credit assessment methods. Moving away from traditional evaluations based solely on past delinquency records, the group is adopting alternative credit scoring models. These models utilize non-financial data, such as living expenses and utility bill payments, to more accurately assess a customer's repayment ability. This approach is designed to expand support for individuals with low-to-middle credit scores, with the alternative model already applied to microfinance loans since March and planned for new mid-rate loan products in the third quarter.