South Korean borrowers use DSR‑linked mortgages and community microloans to expand credit

South Korean banks are promoting “repayment‑condition” mortgage products that let borrowers repay existing personal credit loans to lower their debt‑service‑ratio (DSR) and raise mortgage limits by up to 1.5 billion won. The scheme, described as “DSR magic,” has grown as stricter loan regulations tighten credit supply; five major banks reported household loan balances exceeding government targets by about 2.3 trillion won.

At the same time, a nonprofit “social solidarity economic organization” founded by Lee Chang‑ho in 2011 is providing interest‑free, unsecured microloans of around 100 thousand won to financially‑excluded households. The programme, now called “More People Living Together,” has helped over 18,600 borrowers in 15 years with a 90% repayment rate. Loan balances rose from roughly 30 million won in 2012 to an anticipated 50 billion won by next year, illustrating a grassroots alternative to traditional banking for low‑income Koreans.