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• Research Report of the Illegal Lending (Yamikin) Market in Japan

Research Report of the Illegal Lending (Yamikin) Market in Japan

To examine the influence of Money Lending Business Act which was revised in 2006 and fully enforced in 2010, we conducted questionnaire surveys with borrowers in consumer credit market and monitored their debt situation continuously. According to the results of this survey, those whose credit requests were denied in shrinking consumer credit market are increasingly more dependent on financing from their relatives and friends and that their debt balance from them is increasing, which indicates credit market becoming latent as the result of the revision of the act.
However, such trend has recently begun to change. In other words, debtors whose borrowing in consumer credit market has become more difficult have initially financed their debt through their relatives and friends to secure necessary funds. Today we have confirmed that some of such borrowers who are no longer able to repeatedly and continuously borrow from their relatives and friends gradually resort to underground loan market.
Our assumption in this survey was that borrowers whose financing has become difficult in consumer credit market immediately approach the underground loan market. On the contrary, findings from our surveys indicate that they initially depend on their relatives and friends immediately after borrowings in consumer credit market have fallen into difficulty, and then only gradually approach the underground loan market once their relatives and friends begin to show resistance to their repeated and continuous requests. Similar trend has been observed with the users of financing through credit cards. Their tendency to approach the underground loan market is also increasing, as closures of shops which offered financing through credit cards have become more salient after crackdown by authorities.
According to our survey, users of the underground loan market are in a gradually increasing trend and it is presumed that debtors who begin to borrow in the underground loan market are those whose financing in legitimate loan market has become difficult over the last several months to years. They begin to depend on the loans from underground lenders, once other options have all been tried and are no longer available.

→Japanese Ver.

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