Lending limit to ease for small firms

Shoko Chukin Bank, a government-backed lender concentrating on smaller firms, will raise the ceiling on its unsecured loans from 30 million yen to 50 million yen, effective in November, government officials said Thursday.

The move is intended to alleviate the credit crunch for small and midsize companies as banks are becoming even more reluctant to lend, officials at the Ministry of Economy, Trade and Industry and the Small and Medium Enterprise Agency said.

Shoko Chukin Bank’s unsecured lending facility was created in March to back up financing for smaller firms that are financially healthy and yet find it difficult to borrow money from risk-averse banks.

By the end of September, the governmental bank had made 11,800 loans totaling 73.8 billion yen.