Reason for the Proposal and Main Contents 

The current law regulates the registration of credit businesses and the maximum interest rate limits in order to limit the use of high interest rates and illegal lending in the private money market.

In reality, however, it has been pointed out that it is difficult for financial consumers to distinguish between legal and registered credit businesses, unregistered credit businesses, and illegal private credit businesses.

Accordingly, the proposed revision aims to establish an institutional foundation for eradicating illegal private loans by clearly defining those who are actually operating unregistered credit businesses as “illegal private loan business operators” and “illegal private loan brokers”, and limiting the maximum interest rate which they can receive to the official commercial interest rate (i.e. 6 percent per annum) (Article 11 of the draft).