Chang Hwa Bank|Corporate Social Responsibility-Financial Inclusion

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Financial Inclusion

Commitment on Financial Inclusion

To enhance financial accessibility and inclusivity, the Bank is committed to developing and innovating in both business/financial and non-financial aspects, with the aim of providing equal and inclusive financial services, products, and education to different groups. We also seek to practice UN Sustainable Development Goals (SDGs) on multiple fronts, including SDG 1, 3, 5, 8, 9, 10, and 11, providing assistance and resilience in facing poverty, healthcare, education, gender equality, employability, and offering friendly and affordable financial products and services to underprivileged communities. The Bank is committed to achieving the following goals, gradually realizing an inclusive and sustainable financial ecosystem:

Prioritize stakeholder engagement, understanding societal expectations, targeted group’s needs and preferences through market research, feedback, and dialogues, as a basis for innovating and expanding the range of financial products and services, and develop the suitable, available and tailored delivery methods, products and services for underserved groups or regions.
Assist targeted groups in preventing or resolving over indebtedness, providing channels and procedures for pre-negotiation and mediation of debts.

Provide appropriate non-financial supports such as financial education and outreach to underserved groups, promoting financial literacy through multiple avenues and the financial well-being of underserved groups.
Establish diverse channels and mechanisms for complaints and communication, improving accessibility and effectiveness to financial inclusion clients in addressing and resolving issues promptly.
Establish relevant guidelines and set up dedicated unit ” Treat Customers Fairly Facilitating Committee” to be responsible for promoting the Principle to Treat Clients Fairly ,financial friendliness and financial inclusion.The Committee is chaired by Managing Director and President and overseesed by him to implementation to ensuring equal rights, non-discrimination, and protection for targeted groups, and enhancing measures and mechanisms for financial friendliness and financial inclusion.
Organize education and training programs for employees on fair treatment of clients, financial friendliness and financial inclusion, to prevent unrespectful treatment and discrimination of targeted groups, or aggressive sales techniques that may harm clients’ rights during services or sales.
Engage with external partners in the value chain to promote inclusive finance.

※Performance and Benefit
The Bank offers tailored products and services aimed at the financial inclusion of underserved groups

Loans: we provide loans with favorable conditions compared with the general market for different financially disadvantaged groups.

Number of clients reached: 19,930
Number of transactions/contracts: 32,866

Targeted clients	Loans
Women, Disabilities	Micro-Business Startup Phoenix Program
Young People	Loans for Startup Funding for Young Entrepreneurs Youth Assured First Homebuyer Loan
Microbusinesses	Keelung City SME Dream-Come-True Loan Hakka Local Revitalization Preferential Loan
Low- income individuals, Disabilities, Elderly People	Housing subsidy loan
Elderly People	Real Estate Pension Loan for the Elderly

2. Microinsurance
The Bank provided micro-insurance donations to people in the disadvantaged groups in the total amount of micro-insurance premiums of NT$104,710 in 2022 to assist disadvantaged groups with specific identities in obtaining basic protection for a period of time with relatively low insurance premiums, so as not to be affected by financial difficulties due to unpredictable specific risks and incidents and to increase accessibility to basic security for disadvantaged groups.
● Targeted clients: Low- income individuals, Elderly People, Disabilities
● Number of clients reached: 1,507
● Number of transactions/contracts: 1,507 3.
3. Other
The Bank provides preferential plans for payment upon signing and management fees to the elderly and people with disabilities in applying for the care trust to ensure retirement planning and property security. We also offer child care trust for customers who intend to plan ahead for the living of their underage children or disabled children to prevent from being subjected to fund shortage due to any change in family conditions in the future.
● Targeted clients: Elderly People, Disabilities, young people
● Number of clients reached: 4,170
● Number of transactions/contracts: 4,170

Provision of Various Relief Loans in Line with the Government's Policies

The Bank upholds its responsibility to care for customers and actively supports government relief policies, effectively implementing both the "Government Relief Programs" and our own "Related Relief Initiatives" to assist customers affected by the pandemic.

Assistance to Debtors in Resolving Debts

For debtors who apply for debt workout, mediated debt workout, and debt settlement in accordance with the Consumer Debt Clearance Statute, or individual debtors who apply for debt negotiation, we evaluate their income and work ability and other factors comprehensively, and encourage them to actively resolve their debts and return to normal life, thereby facilitating the recovery of debts.

► In 2022, the Bank actually accepted a total of 367 debt workout cases, of which 302 were completed, and 241 cases were established, with a success rate of 79.80%. The total debts negotiated with contracts signed were in the amount of NT$20,105 thousand.

Assistance to Entrepreneurs to Realize Dreams

In response to the UN Sustainable Development Goals of "No Poverty," "Zero Hunger," "Gender Equality," and "Decent Work and Economic Growth," the Bank has initiated several financing projects centered around financial inclusivity, including the "Micro-Business Startup Phoenix Program" and "Loans for Startup Funding for Young Entrepreneurs." We hope to inspire and support women, youths, middle-aged and older individuals, microenterprises, and communities, providing them with better opportunities for entrepreneurship and self-realization while promoting gender equality and inclusive finance.

Entrepreneurship-related loans help individuals with funding needs access startup capital during the initial and subsequent operational stages, facilitating business growth, creating employment opportunities, reducing unemployment rates, and promoting economic development.

As of the end of 2022, the Bank provides relevant loans as follows:

Giving Female Entrepreneurs a Leg Up：

The Bank pays close attention to the issue of women's economic autonomy and human rights and offers the "Micro-Business Startup Phoenix Program". Statistics revealed that by the end of 2022, 69% of female entrepreneurs have received loans, melding gender equality into core business practices.
The Bank clinched the "Banking for Women Initiative of the Year - Taiwan" award in "2022 Asian Banking & Finance Awards - The Retail Banking Awards" for two consecutive years, leading the development of the womenomics.

An entrepreneurship journey
With a view to ensure a healthy diet for her family, Mama A, an immigrant who had left her faraway hometown to devote her whole life towards taking care of her family, actively picked up agricultural knowledge. Since taking the first step of building a simple net house by herself, Mama A had gone on to use natural and low-carbon biological cycle mechanism to produce non-toxic eggs. Mama A watched over the food production and food safety like a hawk and obtained funds through the Bank's Micro-Business Startup Phoenix Program to gradually build an organic, friendly and symbiotic closed-loop agricultural system. The Bank supports the growth of sustainable business with resource injection and shares the circular benefits of the environment and economy.
Lending youths a helping hand to start up and strengthen business management skills
The Bank made Loans for Startup Funding for Young Entrepreneurs available for young people and assists them in pursuing entrepreneurship coaching related courses at government-approved organizations during the pre-loan application stage to strengthen business management skills and knowledge. As of end of 2022, a total of 10,275 young entrepreneurs with loans had undergone the courses.

International Financial Branch Case Study：

Company A is a microfinance institution in Cambodia with a mission to provide microfinance services to help improve the living standards of the impoverished population and contribute to national productivity. The Bank has provided financial assistance to support the operations and development of Company A through syndicated loans. As of 2022, Company A primarily serves rural women, covering 92% of rural areas in Cambodia and serving over 850,000 customers. The Bank has indirectly helped economically disadvantaged individuals access sound microfinance services.

Promote the Development of Industry, Community and SMEs

Promoting Industrial Development

In line with the Government's strategy of promoting the development of the "Five Plus Two Industry Innovation Plan", namely "smart machinery", "Asia Silicon Valley", "green energy technology", "biotechnology and medicine industry", "defense industry", "new agriculture" and "circular economy", CHB Venture Capital invested a total of NT$242 million in 2022, of which the investment amount in the "Five Plus Two" sector amounted to NT$224 million, accounting for 92.56% of the total investment amount.
In order to accelerate the economic momentum and respond to the government's investment plan of "public share partnership, tens of billions of venture capital", CHB Venture Capital has coordinated private funds and resources and has worked with our partners in raising a total of NT$618 million to establish the Changneng Fund, focusing on three major investment fields of "electric vehicle-related industry supply chain", "digital technology", and "traditional industry strategical transformation" in the hope to accelerate the upgrading and development of the industry.
In alignment with the government's angel investment fund program, CHB Venture Capital has allocated NT$30 million of its own funds for exclusive use, focusing on digital technology and AIthemed industries. The goal is to expand investment capacity, support emerging industries, and fulfill corporate social responsibility by becoming a guardian angel for young entrepreneurs.

Supporting SMEs

According to statistics from the Small and Medium Enterprise Administration of the Ministry of Economic Affairs in 2021, there are over 1.59 million small and medium enterprises (SMEs) in Taiwan, accounting for over 98% of all businesses. Although SMEs have a smaller individual scale, their flexible business strategies allow them to quickly adapt and respond to changes and challenges in the external environment. Thus, SMEs are important borrowers for the Bank.

In response to the US-China trade dispute and the motivation of overseas Taiwanese businesspeople to return their investment to Taiwan, the Bank responds to the government's policy by launching three major plans, namely the “Welcome Taiwanese Businessmen to Return to Taiwan for Investment Project Loan”, “Rooted Taiwanese Enterprises Accelerated Investment Project Loan”, and “SME Accelerated Investment Loan”, to assist domestic enterprises in upgrading and transforming themselves toward smart and innovative to strengthen their competitiveness.

As of the end of 2022, the Bank had approved 194 accounts with an approved amount of NT$110.583 billion. Among them, there are 152 active accounts with a loan balance of NT$46.759 billion.
The bank’s short-term strategy is to continue to develop the SME client base, enhance the foundation of credit business, and increase the market share of credit business while our longterm strategy is to actively strive for financing opportunities arising from the “Three Major Programs for Investment in Taiwan” and to support six core strategic industries, creative industries, and green energy industries to facilitate SMEs' development.

To strengthen SMEs' financial foundation, the Bank collaborated with the Taiwan Small & Medium Enterprise Counseling Foundation to assist companies with financial examination and the use of cloud examination resources and to provide cross-industry and cross-field comprehensive consulting services to enhance their competitiveness. In 2022, we have assisted a total of 50 SMEs with financial examination and cloud examination.
During the pandemic, the Bank undertook in the "Central Bank Special Refinancing Loan Program" to assist SMEs in obtaining loans to overcome the impact of the pandemic. As of the end of June 2022 (the end of this Program), the Bank has accumulated 12,189 borrowers with a total loan amount of NT$30,984 million. In August 2022, we received the Central Bank's Outstanding Performance Award.

As of the end of December 2022, there were 102 non-performing loans (including overdue payments) under the Central Bank Special Refinancing Loan Program in a total amount of NT$110 million.

The Bank launched the “Keelung City SME Dream-Come-True Loan” to assist SMEs in Keelung City in successfully obtaining the funds needed for operations. As of December 2022, 20 applicants had applied for the loan with a loan balance of NT$8.4 million.
In order to help SMEs jump on the ESG bandwagon, the Bank and the Taiwan Small & Medium Enterprise Counseling Foundation jointly organized the “2022 ESG Forum for Advanced Deployment of SMEs”, so that SMEs can learn about the concept of sustainability and be able to prepare and adjust their business direction as soon as possible with 87 participants.

Promoting Community Development and Revitalization

In terms of community development loans, the Bank cooperates with the Hakka Affairs Council to support Hakka culture and create employment opportunities in Hakka communities by enhancing service capabilities or expanding operational scales. We launched the "Hakka Local Revitalization Preferential Loan," contributing to local revitalization and sustainable development policies.

Since its launch in February 2019 until the end of December 2022, there were 5 active accounts with a loan balance of NT$12,595 thousand.
※As of the end of December 2022, there were zero non-performing loans (including overdue payments) under the Hakka Local Revitalization Preferential Loan in a total amount of NT$0.

Compatible Financial Products

Micro-insurance Donation

The Bank actively responses to the promotion of the micro-insurance policy by the FSC, and provided micro-insurance donations to people in the disadvantaged groups in the total amount of micro-insurance premiums of NT$104,710 through the matchmaking by Cathay Life Insurance Co., Ltd., in 2022 to assist disadvantaged groups with specific identities in obtaining basic protection for a period of time with relatively low insurance premiums, so as not to be affected by financial difficulties due to unpredictable specific risks and incidents and to increase accessibility to basic security for disadvantaged groups.

Elderly Care

To be in line with the long-term care policy and enhance the protection to the elderly, the Bank sells long-term care insurance products and aging-related financial friendly service products as an agent promoting economic models for sustainable product transitions and improving accessibility to insurance resource accessibility for the elderly demographic with planning needs.
As of the end of 2022, the sales are as follows:
To support the government's long-term care and comprehensive trust plan while fulfilling social responsibility, the Bank has entered into a trust partnership and signed real estate development trust and MOU with the "Guangci Long-term Care Association" in Yilan. To protect the rights of residents, if the deposit collected is intended for trust, the Bank serves as the trustee. This can also motivate residents or their family members to establish long-term care trusts to safeguard the assets of the elderly and use the trust account to pay for medical care, nursing home, or caregiving expenses.

In response to the government’s promotion of the elderly care trust system, we provide preferential plans for payment upon signing and management fees to the elderly and people with disabilities in applying for the elderly care trust.

As of the end of 2022, the Bank had operated the trust business for the elderly and people with disabilities with a total of 4,152 valid contracts and a total trust property amount of NT$1.377 billion.

Right of Residence

Middle-to-low-income households, underprivileged groups, existing mortgage borrowers affected by disasters, Urban Renewal Project Loans, Loan for Rebuilding unsafe and old buildings.

"Subsidized Home Purchase (Acquisition) and Repair Loan": In collaboration with the Construction and Planning Agency of the Ministry of the Interior, the Bank aims to alleviate the interest burden of middle-to-low-income households and underprivileged groups in purchasing and repairing residential properties. The beneficiaries include economically disadvantaged individuals and specific underprivileged groups.
► As of the end of 2022, there were 1,204 borrowers with a loan balance of NT$1,797.75 million.
"Urban Renewal Project Loans": In line with the government's implementation of urban renewal policies, the loans improve the spatial environment and revitalize urban functions, enhance public interests for residents, assist urban transformation, improve urban disaster prevention capabilities, and enhance quality of life.
► As of the end of 2022, there were currently 15 projects underway with a loan balance of NT$6,201.49 million.
“Loan for Rebuilding Dangerous and Aging Homes”: Taiwan is facing the phenomenon of "aging population and buildings." The majority of housing conditions are poor, with over 4.4 million aged buildings that are on average over 30 years old, raising concerns about residential safety throughout Taiwan. The Bank supports to the government's policy on reconstruction of dangerous and aged buildings and launched the “Loan for Rebuilding Dangerous and Aging Homes" in 2018 to assist homeowners in creating a more secure living environment through practical measures.
► As of the end of 2022, there were currently 20 projects underway with a loan balance of NT$3,701.71 million.

Youth and elderly groups

"Youth Assured First-Time Homebuyer Loan": Designed for the housing and family needs of the younger generation while alleviating the financial burden of homebuying.
► As of the end of 2022, there were 8,336 borrowers with a loan balance of NT$23,615.21 million.
"Reverse Mortgage Loan for Elderly Homeowners": We provide elderly individuals with the option to utilize their own homes by utilizing the framework of reverse mortgage loans to access funds needed for retirement living, promoting aging in place.
► As of the end of 2022, there were 7 borrowers with a loan balance of NT$2.98 million.
We assist elderly customers in adopting a rental-based retirement living model, working with the "Rental Housing Service Business Association of the R.O.C." to provide a platform for rental property management and agency services. This platform aims to connect elderly property owners who have rental needs for non-owner-occupied properties with potential tenants, helping elderly individuals overcome difficulties in rental property management and supporting them in adopting a rental-based retirement living model.

Petite bourgeoisie friendly

To make it easier for customers who make moderate income and the petite bourgeoisie to invest in ETF, the Bank has increased diversified investment choices. For instance, the Bank lowered the minimum subscription amount for USD-denominated ETF from USD5,000 to USD2,000. Minimum subscription amount for HKD and CNY-denominated ETF was adjusted from 50,000 to 12,000.

Financial-Friendly Services

To ensure that all segments of society can fully enjoy basic rights and have access to equal and convenient financial services, the Bank provides multiple friendly service measures, aiming to achieve SDG 10's sustainable goal in reducing inequality.

Accessible Services

Automated Teller Machines (ATM)

The Bank has set up an "accessible service counter" and a "service bell" at all operating units. All 637 automated teller machines (ATM) of the Bank are compatible with barrier-free models, of which 120 ATMs are for the visually impaired and the Bank has set ATMs in remote areas to provide local people with convenient financial services.

Preferential fees：Since January 1, 2017, the Bank has provided people with disabilities with free ATM interbank withdrawal fees three times a month. A total of 813 free interbank withdrawals were offered to 81 people in 2022.

The Bank’s official website, friendly zone on the online banking platform, and online ATM are all with friendly services adopted in line with the Web Content Accessibility Guidelines 2.0 at the AA level. The CHB Mobile App and CHB Lucky Charm App have also been refined in line with the Directions for Mobile App Accessibility Validation announced by the National Communications Commission, so that people with disabilities can enjoy a more complete financial transaction environment. In addition, the Bank has added "New Taiwan Dollar Fixed Deposit Inquiry and Termination" and "Credit Card Limit and Rates" functions to our accessible online banking site.
The Bank's customer service center offers automated voice service processes, as well as options such as the "Customer Message" on the official website, smart real-time chatbots, and text chats with real representatives for individuals who prefer non-voice communication, catering to their specific needs.
The Bank has signed an MOU with the "Parents' Association for Persons with Intellectual Disability, Taiwan" providing ongoing counseling services and preferential pricing for the Association's target beneficiaries.

Elderly Care

The Bank has established "Priority Assistance for Customers 65 and Over" and a "Taiwanese Language Hotline" services. When customers call the customer service hotline and enter the automated voice service process, the system automatically recognizes the input ID number and assigns a representative for assistance, reducing waiting time. Customers who require Taiwanese language support can select the Taiwanese language function through the voice menu, ensuring smooth communication.

International Deepening

In response to the ”Blueprint for Developing Taiwan into a Bilingual Nation by 2030” and to meet foreigners' financial needs, the Bank has completed the establishment of 80 bilingual branches in 2022. It is expected to complete all 185 bilingual branches of the Bank by 2028 in line with the international trends.
The Bank opened the "Vietnam Labor Remittance" service, which provided a convenient and fast way for foreign migrant workers in Taiwan to remit money to their hometown.