Shaw Capital Management Headlines : South Korea: High Interest Charged by Finance Companies Probed
Posted by: Debt Relief : Category: Finance
http://www.syminvest.com
Source : THE DONG-A ILBO
Jul 2010
Seul, South Korea, July, 24 2010 – An investigation into finance companies began Friday after President Lee Myung-bak complained a day earlier that the companies are charging high interest rates while visiting a branch of a micro-finance foundation.
After a meeting with chief directors of micro-finance foundations at the Bankers Club in Seoul Friday, Financial Services Commission Chairman Chin Dong-soo told reporters that a probe will begin into finance companies imposing high interest rates on loans to individuals and devise countermeasures.
“A 30-percent interest rate is very high,” he said. “Through an in-depth investigation, we will devise measures to ease the burden on the working class.”
“The main operations of finance companies are leasing, installment financing and providing auto loans, but unsecured loans account for a significant share of their operations,” he added. “This means demand for livelihood funds and emergency loans is high in the market, but interest rates in the 30-percent level is excessive.”
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The marketing share of unsecured loans among finance companies is around five percent and the amount of extended loans is about three trillion won (2.5 billion U.S. dollars). The interest rate on loans for individuals at such companies is an annual average of 32.6 percent and the default rate is near the legal limit of 44 percent.
Financial authorities estimate that the financing costs of finance companies are five to nine percent and that bad debt reserves are more than five percent. Though costs for management and collecting from borrowers are included, the combined cost of financing is under 10 percent, making 30 percent excessive, they said.
To improve the interest rate systems of finance companies, the commission and the Financial Supervisory Service will soon set up a fact-finding team to analyze financing and marketing costs of such companies and conduct on-site investigations if necessary.
Financial authorities will also crack down on the illegal practice of paying high fees to loan collectors to increase their numbers.
Finance companies will also be encouraged to make interest rate cuts by removing handling fees similar to upfront interest. Generally, they impose around three percent of the loan amount as a handling fee.
Credit card companies, which had been at the center of controversy for charging high interest for cash services, eliminated handling fees early this month.
Separately, financial authorities will reduce the interest burden on the working class, who are excluded from institutional financing, by invigorating micro-finance and the “sunshine loan” system designed to lend startup and emergency funds to low-income households at low interest.
Chairman Chin said, “After the Asia-wide foreign currency crisis and the latest global financial crisis, the financial situations of low-income households with low credit ratings have gotten worse,” adding, “We should help the working class` finances to gradually allow a soft landing by expanding guaranteed sunshine loans.”
He also told the micro-finance chief directors, “I urge operators of micro-finance foundations to return to the basics and make every effort to help low-income households with low credit ratings.”
Watch the video related to finance companies
EverythingFinanceBlog.COM The two leading credit card companies in the world today are the competitors Visa and MasterCard. They both operate along very similar lines. Read More: everythingfinanceblog.com
December 12th, 2011 at 10:56 am
Whatever you say about Clinton, he is quite possibly the smartest President we ever had. And by the time he left office, the economy was flushed with cash. A decade later, and we’re on the brink of an economic meltdown.
December 12th, 2011 at 11:15 am
@uodet i remember when the dems were saying the repubs were just “the party of ‘no’”. i always said to my liberal parrots “i wish that they were!!”
December 12th, 2011 at 11:40 am
First you must put together an introductory letter and include your service in
detail as to what you charge per repo etc –
Mail it to all the auto sellers in your phone book – the letter is an advertising tool
to let them know you're around and available – and have some business cards
made up to send with the advertising material – this is the key
Make it presentable, realistic with the economic times now and you can be reasonable
with your charges for a while to gain some additional business – but it's not going to
work as fast as overnight but it will let them know you're around to help and that's the
main objective an advertising campaign is your best bet.
December 12th, 2011 at 11:41 am
The governing body for financial institutions in the US is the Securities and Exchange Commission (SEC). But hedge funds are not included.
December 12th, 2011 at 11:49 am
Yes, I agree that they should, the ones that have failed anyway and are effectively in government receivership. Why should a company be "too big to fail"? They've hurt the country, the world, their shareholders, all of us, so they can pay themselves huge salaries and bonuses. I say make them "too small to matter," and then if they bankrupt their companies through speculation they'll have to kiss their asses goodbye.
December 12th, 2011 at 7:40 pm
Fannie & Freddie set the requirements for ALL mortgages & purposely kept lowering the standard for mortgages – thereby qualifying more people for mortgages & placing people in mortgages they couldn’t afford. Their push to unreliable point scores, unverified mortgage reports, and exotic mortgages can ALL, I repeat ALL, be traced to Fannie & Freddie. & Thomas Woods’ “Meltdown” is very good.
December 13th, 2011 at 4:14 am
@hob976 Isn’t there a video of Schiff saying that, while everyone else on the panel laughed at him?
Of course, we could use a person like him right now in Washington, pointing policy makers in the right direction. Instead we have the Obama school of economics, which is the same ole shit of the last 70 years, expecting different results.
December 13th, 2011 at 5:36 am
An unpleasant listening experience due to only one audio channel being active in this video. I expect better from ReasonTV.
December 13th, 2011 at 10:05 am
People are really waking up aren’t they? lol I love it.
If you understand this, please message me and I want to get on your friends list.
We have something in common; we’re learning how to say no, and mean it.
I have one thing to say to the Handlers;
NO
Note to globalist ass faces;
get used to the word NO because you’ll be hearing ALOT more of it from now on.
Unite, get to know your neighbors, family and friends. You will be relying on them lots more in the very near future.
Unite.
December 13th, 2011 at 2:24 pm
hi,my name is sarah.its very difficult to get loans from financial houses if u have bad debts.i had dis same problem a wile ago.bt luckly i got introduced to this loan firm dat offers long term payback and low interest rate.u can contact them at sallylenders@hotmail.com. am sue they can help you.
December 13th, 2011 at 11:38 pm
None. Your track record of paying back loans is dismal.
December 14th, 2011 at 4:23 am
Look,
.
.
ALL economic bubbles are CREATED by Governments.
.
.
PERIOD.
December 14th, 2011 at 6:09 am
No lender will talk to you unless you provide them with a valid business plan. Go to http://www.sba.gov , http://www.score.org or http://www.bplan.com for sample business plans and instructions on how to write a business plan.
Then, go to http://www.score.org/ and in the upper left hand corner, enter your zip code. On the next screen, you will get information on the nearest SCORE chapter. Call them and arrange for a free meeting with a SCORE counselor to review your business plan and discuss various loan options available to you.
SCORE is a nonprofit association dedicated to entrepreneur education and the formation, growth and success of small business nationwide. SCORE is a resource partner with the U.S. Small Business Administration (SBA).
SCORE has 389 chapters in locations throughout the United States and its territories, with 10,500 volunteers nationwide. Both working and retired executives and business owners donate time and expertise as business counselors.
December 14th, 2011 at 11:54 am
BEST ANSWER: the term financial institutions are commonly used for finance companies only. But they are very large organisations. for example RBI, IDBI, sbi etc etc all the commercial banks, other government banks and credit providers. all these are registered companies only.financial system contains, financial institutions, finanial services, financial markets and financial financial products. financial companies are part of financial institutions.
December 14th, 2011 at 11:03 pm
Bankruptcy & Redistributionist Slavery is NOT “progress”.
December 15th, 2011 at 12:04 pm
Its enough to make me shake my head and cry (and I never cry) when I hear libs start to recognize the problems that they ignored before and after a crisis.or when creating a future crisis like obamacare will. What did she say at 5:06 “it was suppose to make things more affordable” and then sumthing bad happened. Sounds familiar.
December 15th, 2011 at 4:19 pm
If you want to stay small you should be purchasing auto's at wholesale price and obtaining at least 70% of your investment in the form of a down payment.
December 15th, 2011 at 6:18 pm
Focus on cleaning up your credit reports.
There are some amazing books that can help you.
I like Credit and Debt Repair for Dummies.
Available at any library or bookstore.
Forget the score for a while. Start focusing on those reports and what's in them.
Lenders don't focus on the 3 digit score – they will worship all three reports.
You can pay off items, and it will not incrase your score, but..
A future lender will see them as paid and act accordingly.
That is why you see people with horrendous scores getting homes sometimes.
They have done an amazing job at paying off items.
The book will tell you how to do it right.
While you are getting that book on Credit Repair, get another book on
First Time Home Buying
The book will tell you what to expect and what to look out for.
Note: Ideal scores are scores of 740 to 760 or above…