Policy Loans to Block 18% Franchise Lending After Myeongnyundang Case

The government is tightening oversight of how franchisors use policy funds to prevent a repeat of the so-called Myeongnyundang case. The measure aims to stop franchisors from borrowing public policy money at low rates and then relending it to franchisees at high rates of around 18%. The focus is on preventing policy funds from being used in a way that departs from their original purpose in financial dealings between franchisors and franchisees. If a similar case occurs again, the franchisor involved will have its supply of policy funds suspended. The step is intended to reduce the financial burden on franchisees and preserve the public purpose of policy financing. Source: yna.co.kr