The government will establish a new fund to take over debts owed by small and midsize companies as part of a package compiled Friday to address the "double loan" problem facing survivors and wrecked firms following the March 11 disaster.
The package, worked out byCabinet ministers, is intended to help disaster victims who often have to take out new loans on top of their existing debts. It also calls for Japan Housing Finance Agency to waive mortage repayments and reduce interest rates.
The Cabinet of Prime Minister Naoto Kan plans to incorporate the relief measures in a second supplementary budget for fiscal 2011 to be submitted to the Diet in mid-July at the earliest, government officials said.
The envisaged fund, which will be created by the government and financial institutions, will also invest in debt-laden corporations, the officials said.
The package also calls for the public and private sectors to provide consultation services for disaster victims, subsidize loan interest for disaster-hit businesses, and offer credit guarantees for firms that leased equipment.