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- Summary of The Annual Bulletin
- The Current State and Outlook of Business Loan in Japan
The Current State and Outlook of Business Loan in Japan
Masaru Ikoma
SPC Consulting Ltd.
*I would like to consider the current condition and prospect of small business loan market through my business experience. One of them is a lender when I had joined in the Hokkaido Takusyoku Bank, Daiwa Finance, Sanyo Electric Credit and the other is a borrower concerning for small business company as a consultant.
*The total amount of enterprises in Japan is about 4,210,000. They are including about 3,660,000 small business companies and firms (87.0%) which need small business loan. These companies and firms are having cash-flow problems by the strict regulations of Moneylending Control Act and Installment Sales Act.
* The strict regulation of Moneylending Control Act and Installment Sales Act makes an impact to the banking and moneylending industry as below.
The banking industry has been reluctant to make loan for them to avoid the bankruptcy risk.
The moneylending industry could not make loan for them because of their poor money-raising ability.
*Explaining two bankruptcy illustrations of small business companies which had been influenced by the strict regulations of Moneylending Control Act and Installment Sales Act.
*It would be presumed that the banking industry could not lend money to the small business companies and firms due to the lack of screening skill for them.
*The strict regulations would be caused to bring down the maximum allowable interest rate to 15%~20% and reduce the limit of borrowing facility. Therefore, it would face a growing risk to lend money to a large indefinite number of the small business companies and firms by ordinal method.
*The moneylending industry could be required a new method for providing money to the small business companies and firms such as cooperating with other category of industry.