🚨 Inclusive Finance

Today Korean Social News for Beginners | 2025.11.26

0️⃣ Financial Accessibility for Transportation Vulnerable and Limits of Inclusive Insurance

📌 Empty Seats Under the Name of Inclusion... Shadows of 'Inclusive Finance'

💬 While mobility rights for the transportation vulnerable such as the elderly and people with disabilities are gradually expanding, their access to finance and insurance remains low. Insurance companies classify them as high-risk groups and are passive about developing products, and the 'Inclusive Finance 2.0' policy promoted by the Financial Services Commission is also designed around young people and small business owners, leaving the transportation vulnerable still excluded. Experts point out that true inclusive finance means creating an environment where people can actually use services, not just making financial products. With the elderly and people with disabilities making up about 30% of the total population, expanding customized financial services for them and active policy support from the government have emerged as urgent tasks.

💡 Summary

• Inclusive finance is a policy that provides stable financial services to socially and economically vulnerable people to reduce financial gaps.
• The transportation vulnerable such as the elderly and people with disabilities still face difficulties in buying insurance and using financial services.
• The passive attitude of insurance companies and resolving blind spots in government policies are needed.

1️⃣ Definition

Inclusive Finance refers to a policy concept that provides stable financial services to socially and economically vulnerable people, reduces financial gaps, and supports all citizens to participate in basic financial activities. The goal is to expand systems and infrastructure so that financially excluded groups can access basic financial services such as loans, insurance, and savings.

The core of inclusive finance is not just one-time support but promoting sustainable financial participation. People with low credit, low income, the elderly, and people with disabilities should be able to use financial services at reasonable costs, and it includes helping them build their own financial management skills through financial education and counseling.

💡 Why is it important?

• Financial exclusion deepens economic inequality and causes social polarization.
• The need for inclusive finance is growing with aging and increasing population with disabilities.
• As digital finance expands, accessibility issues for information-vulnerable groups are emerging as new challenges.
• Financial participation is essential for individual economic independence and social integration.

2️⃣ Current Status and Problems of Inclusive Finance

📕 Limited Financial and Insurance Accessibility for Transportation Vulnerable

• Insurance enrollment for the elderly and people with disabilities is limited. The main situation is as follows:

  • Although the elderly and people with disabilities account for about 30% of the total population, customized financial and insurance products for them are insufficient.
  • Insurance companies classify the transportation vulnerable as high-risk groups due to concerns about increased loss ratios.
  • People with disabilities often face rejection when trying to buy insurance or must pay high premiums.
  • The elderly have very limited insurance products available due to age restrictions.

• Exclusion is deepening in the digital finance environment. Main problems are as follows:

  • As non-face-to-face financial services expand, accessibility for elderly people who have difficulty using digital devices has become even lower.
  • Many financial apps lack accessibility features for visually and hearing impaired people.
  • As financial institution counters decrease, inconvenience for transportation vulnerable people who prefer face-to-face services is increasing.
  • Financial fraud damage also tends to concentrate on information-vulnerable groups.

📕 Passive Attitude of Insurance Industry

• They are passive about product development due to concerns about loss ratios. Main reasons are as follows:

  • The transportation vulnerable are classified as high-risk groups according to statistical analysis showing they have a higher possibility of accidents.
  • Insurance companies avoid developing low-profitability products and set high premiums for existing products.
  • Detailed risk analysis by disability type and age group is insufficient, so they are uniformly considered high risk.
  • Loss-sharing structures such as reinsurance systems are inadequate, so insurance companies must bear risks alone.

• The effectiveness of inclusive insurance is low. Main limitations are as follows:

  • Some insurance companies have launched inclusive insurance products, but coverage is limited and premiums are still high.
  • Due to lack of promotion, many transportation vulnerable people don't even know these products exist.
  • Enrollment conditions are strict or procedures are complex, so actual usage rates are low.
  • Government support or incentives are insufficient, making it difficult to encourage voluntary participation by insurance companies.

📕 Blind Spots in Government Policy

• Inclusive Finance 2.0 is focused on young people. Main problems are as follows:

  • The Inclusive Finance 2.0 announced by the Financial Services Commission in 2024 targets mainly young people, self-employed, and vulnerable borrowers.
  • Specific policies for the elderly and people with disabilities are relatively neglected.
  • The focus is on introducing systems rather than improving the actual financial environment for the transportation vulnerable.
  • Regional gaps occur as support levels for transportation vulnerable differ by local government.

• Policy implementation is insufficient. Main tasks are as follows:

  • Many evaluate that even when inclusive finance policies are announced, they are difficult to feel in actual practice.
  • Mandatory power over financial institutions is weak, relying only on voluntary participation.
  • Financial education and counseling programs for the transportation vulnerable are insufficient.
  • Policy monitoring and evaluation systems are inadequate, slowing improvement.

💡 Main Issues of Inclusive Finance

1. Insurance accessibility: Problems with insurance enrollment restrictions and high premiums for elderly and people with disabilities
2. Digital gap: Exclusion of information-vulnerable groups deepens with expansion of non-face-to-face finance
3. Policy bias: Insufficient support for transportation vulnerable due to youth-centered policies
4. Insurance company passivity: Inadequate development of inclusive insurance products due to loss ratio concerns
5. Lack of implementation: Low field perception and weak enforcement compared to policy announcements

3️⃣ Directions for Improving Inclusive Finance

✅ Expanding Customized Financial Services for Transportation Vulnerable

• Detailed product development by disability type and age group is needed. Main directions are as follows:

  • Reasonable premiums should be set through differentiated risk assessment according to disability type and degree.
  • For the elderly, various enrollment options should be provided according to health status.
  • The actual accident rate and risk level of the transportation vulnerable should be precisely analyzed to prevent excessive premium setting.
  • Coverage of inclusive insurance products should be expanded and enrollment procedures simplified.

• Digital accessibility should be strengthened. Main tasks are as follows:

  • Voice guidance for visually impaired people and subtitles and sign language services for hearing impaired people should be mandatory in financial apps.
  • Simple user interfaces and large text options should be provided for the elderly.
  • Face-to-face counters should be maintained or visiting financial services expanded.
  • Education and counseling for preventing financial fraud should be strengthened.

✅ Strengthening Reinsurance System and Government Support

• The government should participate in loss-sharing structures. Main measures are as follows:

  • Through reinsurance systems, part of the risk borne by insurance companies should be shared by the government or public funds.
  • Participation by insurance companies should be encouraged through tax benefits or regulatory easing for inclusive insurance products.
  • For products with high loss ratios, the government should consider providing partial subsidies.
  • Public insurance institutions can jointly develop inclusive insurance products with private insurance companies.

• Incentives should be provided to financial institutions. Main directions are as follows:

  • Inclusive finance performance should be reflected in financial institution evaluations to encourage active participation.
  • Government commendations or support can be provided to institutions that have expanded financial services for the transportation vulnerable.
  • Efforts are needed to discover and spread excellent cases of inclusive finance.
  • Unreasonable discrimination against the transportation vulnerable should be strictly regulated in terms of financial consumer protection.

✅ Improving Policy Implementation and Social Awareness

• Inclusive finance policies should be specified and monitoring strengthened. Main tasks are as follows:

  • The transportation vulnerable should be specified as core targets of Inclusive Finance 2.0 and specific implementation plans established.
  • Policy effects should be regularly evaluated and a feedback system established to improve inadequate parts.
  • Customized inclusive finance programs by region should be operated in cooperation with local governments.
  • Financial education and counseling should be expanded to strengthen the financial capabilities of the transportation vulnerable.

• Social awareness improvement is needed. Main directions are as follows:

  • Social consensus should be formed that the transportation vulnerable also have rights as equal financial consumers.
  • Understanding education about the transportation vulnerable should be provided for insurance company and financial institution employees.
  • The social value of inclusive finance should be widely promoted to encourage voluntary participation by companies.
  • The voices of the transportation vulnerable themselves and their organizations should be actively reflected in the policy decision process.

4️⃣ Related Terms Explanation

🔎 Financial Inclusion

• Financial inclusion is a concept that ensures all individuals and businesses can use financial services at reasonable costs.
  • Financial Inclusion means a state where everyone can access and use basic financial services such as savings, loans, insurance, and payments. The international organization World Bank also considers financial inclusion as one of its development indicators, and it is an important policy task not only in developing countries but also in developed countries.
  • The main elements of financial inclusion are: first, accessibility, meaning people should be able to easily access financial services through physical and digital channels. Second, affordability, meaning services should be available at reasonable costs. Third, usage, meaning an environment should be created where financial services can actually be utilized. Fourth, capability, meaning people should be able to build their own financial management skills through financial education.
  • In Korea, inclusive finance policies have been promoted in earnest since 2019, centered on the Financial Services Commission. Various support programs are being operated for people with low credit, low income, small business owners, and young people, but as digital transformation is rapid, securing accessibility for information-vulnerable groups is emerging as an increasingly important task.

🔎 Inclusive Finance 2.0

• Inclusive Finance 2.0 is a financial support reinforcement plan announced by the Financial Services Commission in 2024.
  • Inclusive Finance 2.0 is a comprehensive measure announced by the Financial Services Commission in 2024 to supplement the limitations of existing inclusive finance policies and expand support targets. It targets mainly young people, self-employed, and vulnerable borrowers, with main contents including credit recovery support, strengthening financial education, and improving digital finance accessibility.
  • Main policy contents include: first, expansion of policy funds for young people and improvement of credit evaluation. Second, low-interest loans and management consulting support for small business owners and self-employed are strengthened. Third, debt adjustment programs to help credit recovery for people with low credit are expanded. Fourth, financial education and counseling services are expanded nationwide.
  • However, there is criticism that specific policies for the elderly and people with disabilities, who are transportation vulnerable, are relatively inadequate. Policy focus is on youth employment and small business support, so it is not sufficiently responding to social changes such as population aging and increasing population with disabilities. Experts emphasize that policy design that encompasses all age groups and classes is needed for inclusive finance to be truly 'inclusive'.

🔎 Mobility Rights for Transportation Vulnerable

• Mobility rights for transportation vulnerable are rights based on constitutional equality and the right to human dignity.
  • Mobility rights for transportation vulnerable refer to the right of people with disabilities, the elderly, pregnant women, people with infants, etc. to move safely and conveniently without discrimination during the movement process. It is based on the right to human dignity under Article 10 of the Constitution of the Republic of Korea and equality under Article 11, and the 'Act on Promotion of Transportation Convenience for the Mobility Disadvantaged' enacted in 2005 is the legal basis.
  • Main contents of the Act on Promotion of Transportation Convenience for the Mobility Disadvantaged include: first, local governments must establish plans for promoting transportation convenience for the transportation vulnerable every five years. Second, accessibility of transportation means such as low-floor buses and wheelchair lift taxis must be improved. Third, convenience facilities such as subway station elevators and ramps must be installed. Fourth, the movement status of the transportation vulnerable must be surveyed and improvement measures prepared.
  • In recent years, physical mobility rights have gradually improved, with increases in the supply rate of low-floor buses and expansion of subway station elevator installations. However, financial and insurance accessibility remains at a low level. Experts point out that for a truly inclusive society, not only physical mobility rights but also financial service access rights must be guaranteed together.

🔎 Reinsurance System

• The reinsurance system is a way to distribute risks borne by insurance companies.
  • The reinsurance system is a method where insurance companies transfer part of the risk they have underwritten to other insurance companies or specialized reinsurance institutions. It helps insurance companies secure financial stability by distributing the risk of large losses and enables them to underwrite more insurance contracts.
  • How reinsurance works: first, the original insurer signs an insurance contract with customers. Second, the original insurer transfers part of the risk to reinsurers. Third, when an accident occurs, the original insurer pays insurance money to customers and receives compensation from reinsurers at the agreed rate. Fourth, reinsurers increase stability by distributing risk on a global scale.
  • Using the reinsurance system is essential for the sustainability of inclusive insurance. Insurance for the elderly and people with disabilities may have high loss ratios, making it difficult for insurance companies to bear risks alone. If a structure is created where the government or public funds share part of the loss in the form of reinsurance, insurance companies can develop inclusive insurance products more actively. Currently, financial authorities are also considering introducing a public reinsurance system in terms of social insurance safety nets.

5️⃣ Frequently Asked Questions (FAQ)

Q: Can people with disabilities or the elderly buy insurance at the same premiums as ordinary people?

A: It is realistically difficult, but some inclusive insurance products allow enrollment at reasonable premiums.

• Currently, most insurance products have differentiated premiums according to age, health status, and disability status. Insurance companies set high premiums for the elderly and people with disabilities who have a statistically high possibility of accidents, or restrict enrollment altogether. Especially for people over 70, the products available for enrollment are very limited.
• However, inclusive insurance products recently launched by some insurance companies are designed so that the transportation vulnerable can also enroll under reasonable conditions. For example, they precisely evaluate risk according to disability type and degree to set premiums that are not excessive, or provide simple screening products for the elderly. The government is also encouraging development of such inclusive insurance, and it is expected that measures to reduce premium burdens through government support or reinsurance systems will be promoted in the future. If you want to enroll, it is good to inquire at the Financial Supervisory Service or inclusive insurance counseling windows of each insurance company.

Q: What should I do to receive inclusive finance benefits?

A: Check and apply for inclusive finance programs of the Financial Services Commission or each financial institution.

• Inclusive finance benefits are largely divided into policy fund loans, credit recovery support, and financial education. First, if you have low credit or are a small business owner, you can apply for policy fund loans through the Inclusive Finance Agency, Credit Guarantee Fund, etc. Second, if you need credit recovery, you can use debt adjustment programs of the Credit Counseling and Recovery Service. Third, if you need financial education or counseling, you can participate in the Financial Education Center of the Financial Supervisory Service or financial education programs of each bank.
• For the elderly or people with disabilities, you can use dedicated counters for people with disabilities or preferential services for the elderly at each financial institution. Some banks provide voice guidance services for visually impaired people and sign language counseling services for hearing impaired people, and if mobility is difficult, you can also apply for visiting financial services. For specific details, you can receive detailed guidance by contacting the Financial Supervisory Service call center (1332) or each financial institution's customer center. Inclusive finance benefits have different eligibility requirements depending on income level, credit rating, age, etc., so it is important to check in advance.

Q: How is inclusive finance different from general financial services?

A: Inclusive finance is a service that strengthens accessibility and affordability for financially excluded groups.

• General financial services provide favorable conditions to customers with high creditworthiness and stable income according to market principles. On the other hand, inclusive finance emphasizes government policies and social responsibility so that financially excluded groups with low creditworthiness or unstable income can also use financial services. For example, general loans determine interest rates according to credit ratings, but inclusive finance policy funds apply low interest rates even to low credit ratings.
• Characteristics of inclusive finance include: first, reducing the burden of financial services with low interest rates and reasonable fees. Second, relaxing enrollment conditions so that people who have difficulty accessing general products can also use them. Third, building long-term financial management capabilities by combining financial education and counseling. Fourth, providing sustainable services using government support or public funds. However, inclusive finance does not provide unlimited support and provides benefits only when there is basic repayment ability. True inclusive finance aims not at one-time support but at helping financially excluded groups achieve economic independence on their own.

View Contents

• Go to Guide