South Korea's Financial Supervisory Service (FSS), the country's financial regulator, is considering a Japan-style guarantee business in which consumer finance lenders screen borrowers and guarantee loans issued by banks and other financial companies to mid- and low-credit customers. Because current law prohibits credit guarantees by consumer finance lenders, officials proposed testing the model through the financial regulatory sandbox before seeking legislative changes based on the results. The proposal came as credit supply to low-credit borrowers has declined since COVID-19, with lenders favoring higher-credit customers and secured loans to remain profitable under the 20% interest-rate ceiling. Participants also discussed broader funding channels, flexible-rate products, capital requirements, and measures to strengthen registered lenders' role in preventing illegal private lending.