The government plans to convert existing school loans into lower-interest ones beginning next month as part of efforts to expand the financial support system for young people, President Lee Myung-bak said Monday.

The government will utilize 50 billion won (US$44 million) contributed by local banks as a guaranty fund for the interest-lowering measure, Lee said during his biweekly radio address.

"As the global economic crisis continues, the lives of low-income families have become more difficult. Many people do not have a second chance to start all over again because of a lack of credit. Many others are struggling with illegal, high-interest private loans," Lee said.

The government has been carrying out various steps to facilitate lending for working-class people, with conglomerates and banks donating financial resources for these loan programs and sometimes engaging first-hand in their implementation.

Lee said some worry about the possibility of borrowers reneging after using up the loans, but that he believes the low-income family loans system should first and foremost be operated "with a warm heart."

"What is actually happening is that a great majority of the borrowers strive to pay the money back. In fact, some borrowers feel so grateful that they make contributions over and above what they owe," he said.

Lee also thanked the people for their support for last week's Nuclear Security Summit.

"Through the summit, we set another great milestone on the path to making a world without nuclear weapons and to leaving a more peaceful and safer world to our children," he said.

"The participating delegations from around the world lavished praise on Korea's impeccable preparations and seamless operation of the summit events. All the credit should go to the people who provided enthusiastic support and cooperation."

The summit was also useful in reaffirming the seriousness about North Korea's missile and nuclear programs, though the international standoff over Pyongyang's nuclear programs was not discussed as part of the summit's official agenda, Lee said.

"Chinese President Hu Jintao urged the North Korean leadership to withdraw its plan to launch a missile and to work to improve the lives of North Korean people," he said. (Yonhap News)