South Korea to Block 18% Interest Lending Using Policy Funds

South Korea will move to prevent a repeat of the “Myeongryundang case” by blocking misuse of policy funds by franchisors. If a franchise headquarters borrows low-interest policy funds, which are backed by public money, and then re-lends them to franchisees at high rates of up to 18%, the supply of policy funds will be halted. The measure follows controversy that funds meant for support were used as a profit tool by franchisors. Franchisees could face heavier interest burdens rather than financial relief, prompting calls for safeguards. Similar cases are expected to lead to restrictions on policy fund access. Source: yna.co.kr