Feb 25 β€’ 07:54 UTC πŸ‡°πŸ‡· Korea Hankyoreh (KR)

"The Problem Is Not Money, But Design": Announcement of 9 Policy Demands for 'Social Finance'

A summit on social finance highlighted the need for structural reforms to support community-driven projects and enhance the role of social finance in addressing local needs in South Korea.

On February 24, 2026, the 'Social Finance Summit' took place in Seoul, emphasizing the importance of social finance in supporting community-driven initiatives. The summit featured speeches from several key figures, including Yoon Ho-jung, the Minister of the Interior and Safety, who acknowledged the growth in the size of loans and investments in social finance since the 2018 governmental plan, but noted shortcomings in qualitative growth. The government aims to integrate support systems for social finance, particularly concentrating on the establishment of the Basic Social Economy Act in the upcoming 22nd National Assembly.

Kim Yong-ki, representative of the Inclusive Finance Research Group, delivered a keynote address stressing that the main issue facing social finance is not a lack of funds, but deficiencies in structure and design that hinder continuous private capital flow into the sector. He outlined the goals of social finance, which include creating social outcomes, transparent risk-sharing, and reinvestment, advocating for separate rules and incentives that align with the unique objectives of social finance. He emphasized the need for tailored frameworks to improve the effectiveness and sustainability of social financing mechanisms.

Additionally, Kim Ki-tae from the Korea Social Solidarity Economy Research Institute argued for community-led renewable energy cooperatives like the 'Sunlight Income Villages' to manage local solar power projects and share profits among residents. However, he pointed out the significant challenges of attracting local participation, from securing land to mobilizing funds and navigating legalities. Estimates suggest that constructing a 1-megawatt solar power facility would require roughly 1.5 billion KRW, and while grants can supplement funds, they remain insufficient for such large-scale initiatives.

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