Updated March. 04, 2013 07:53
The Board of Audit and Inspection as early as Monday will begin a comprehensive probe into the previous Lee Myung-bak administrations financial services projects for the working class, which cost about 11 trillion won (10.16 billion U.S. dollars).
The internal government watchdog said it will mobilize three of its divisions and conduct a main audit of organizations and companies related to financial services for the working class, including Korea Asset Management Corp., Credit Counseling and Recovery Service, Smile Micro Bank, Nonghyup (National Agriculture Cooperative Federation), Suhyup (National Livestock Cooperative Federation), National Fisheries Cooperative Federation and Korea Federation of Community Credit Corporations.
The preliminary probe into financial services for the working class conducted last month reportedly confirmed that the companies in question extended loans by using cars as collateral after advertising that loans would be made unsecured or via a third partys repayment guarantee. It also said the companies operated certain programs only as a formality citing lack of financial gains and extended loans to high-income earners instead of working-class people.
A source at the watchdog said, The funds injected into financial services for the working class amounted to half of the budget invested in the four-river restoration project, adding, We will inspect how helpful (the programs) were to the working class.
On the Lee administration`s financial services policy for the working class, Kim Jeong-shik, an economics professor at Yonsei University, said, Financial service programs for the working class were often ineffective because some of them were scattered among and operated by multiple agencies, causing confusion, or involved sophisticated eligibility requirements.
"To increase the effect of the financial services policy for the working class, a central command is needed to ensure that underprivileged people left in a gray area are taken care of.