As Prime Minister Shinzo Abe's stimulus helps push banks' lending rates under 1 percent, funds are targeting a debt market paying 10 times that.
Japanese banks have cut loans to smaller companies as global regulations get tougher, while a government crackdown on excessive interest rates has curtailed funding from consumer lenders, according to official data. That's opened up a market valued at tens of trillions of yen, according to Tomoaki Tsutsumi, co-chief executive officer of Keystone Partners Co.
Keystone's loan fund charges rates of about 10 percent, Tsutsumi said. That compares with average interest of 0.905 percent in June on new lending by banks, according to Bank of Japan data. The average interest margin on dollar loans in the Asia-Pacific region excluding Japan was at 2.38 percentage points, according to data compiled by Bloomberg.