Policy Funds Curbed to Stop High-Interest Franchise Lending After Myeongnyundang Case

South Korea is moving to block franchisors from misusing policy funds after the “Myeongnyundang case.” If a franchise headquarters borrows low-interest policy funds, which are public in nature, and then lends to franchisees at rates around 18%, the supply of policy funds would be suspended. The measure focuses on preventing cases in which franchisors raise money under the purpose of policy support but shift heavy interest burdens onto franchise owners. Oversight is expected to be strengthened so policy funds are used to ease the burden of intended recipients. Source: yna.co.kr