[노트북 너머] Interest cashback for self-employed people is controversial… Equity must come first

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Why do you think that only the self-employed are having a hard time? People who are really having a hard time, like non-regular workers, can’t even get loans from banks and are barely scraping by through revolving.

‘Win-win finance’, one of the key policies for the common people of the Yoon Seok-yeol government, is still in progress this year. This month alone, approximately 2.28 million small business owners and self-employed people received their loan interest back.

I wonder if the living standards of the common people have improved, but I hear voices expressing regret everywhere. This is because the debt they are carrying is at a level that cannot be covered by interest cashback and refinancing loans.

At first glance, it is understandable that the government has designated the self-employed as priority recipients of financial support. According to data submitted by the Bank of Korea to Democratic Party lawmaker Yang Kyung-sook, a member of the National Assembly’s Planning and Finance Committee, the total balance of loans from financial institutions for self-employed people as of the end of June last year amounted to 1,043.2 trillion won. It is the highest ever. There are many cases of restaurants closing down or factories that have been in business for decades.

However, it is also true that whenever this interest reduction policy is announced, office workers as well as the general public feel a sense of relative deprivation. The self-employed are not the only ones affected by COVID-19 and social distancing, and it is recognized that it is unreasonable to only compensate for their losses. It may be judged that a policy that lowers interest rates for some people because they are small business owners and excludes others from benefits because they are office workers cannot escape the controversy over fairness.

Small business owners who actually received interest refunds also expressed disappointment. The average interest refund for small business owners announced by the authorities is about 730,000 won, but there are many cases where the actual amount received is only a few tens of thousands of won.

Considering the pain of high interest rates, there is a greater need for support for vulnerable borrowers who use secondary financial institutions such as card loans. Card loans are excluded from the interest cashback program for second-tier financial institutions that will be implemented next month.

The issue of moral hazard is also discussed. This is the background to complaints that it is reverse discrimination against self-employed people who have faithfully repaid the loan principal and interest under difficult circumstances.

Of course, it is necessary to overcome the difficulties of small business owners, but the reality is that there are many young people, office workers, and ordinary people who are still experiencing difficulties. It is time for the government to pay attention to the details of how to settle this controversy over fairness.