The Gyeongsangnam-do provincial government will significantly expand its “Gyeongnam Donghaengron” loan program, doubling the maximum loan amount to 3 million won and lowering interest rates, effective March 23, 2026. The changes, prompted by a user satisfaction survey conducted last September, aim to alleviate the financial burden on vulnerable populations and incentivize timely repayment.
The loan program, currently administered through Nonghyup Bank and Gyeongnam Bank, previously offered a maximum loan of 1.5 million won. Existing borrowers who are current on their payments will be eligible to receive additional funds up to the new 3 million won limit. According to the provincial government, 82.2% of respondents to the September survey requested an increase in the loan cap.
In addition to the increased loan amounts, the interest rate on the loans will be reduced from 2.9% to 2.4%. Borrowers who complete financial literacy training or enroll in the province’s welfare membership program can further reduce the rate to as low as 1.9%. The government anticipates these reductions will substantially lower interest payments for borrowers.
A new “payback” scheme will also be introduced for borrowers with a history of delinquency or those currently without income. Borrowers who successfully repay their loans in full by the initial maturity date will receive a refund of 20% of the interest paid. This initiative is designed to encourage responsible borrowing and repayment.
The changes to the loan limits and interest rates are effective immediately, March 23, 2026, for new loans. The interest rate reductions will not be applied retroactively to existing loans. The implementation of the “payback” scheme for delinquent and low-income borrowers is pending further preparation and will be launched alongside the opening of applications for that specific loan category.
Kim In-soo, head of the Gyeongsangnam-do Economic and Trade Bureau, stated that the Gyeongnam Donghaengron program originated from on-the-ground policy suggestions and that the latest improvements reflect direct feedback from residents. He emphasized the government’s commitment to reducing the financial strain on vulnerable citizens while rewarding responsible repayment behavior.
Applications for the revised Gyeongnam Donghaengron loans can be submitted at Nonghyup Bank branches within the province or through the Gyeongnam Bank mobile banking application.
