The Finance Ministry will consider how the government-affiliated Japan Development Bank could be used to supply funds to smaller firms struggling with a credit crunch, Vice Finance Minister Koji Tanami said Thursday.

Tanami was referring to the decision, reportedly made by the ruling Liberal Democratic Party, that the JDB’s function should be expanded to lend operational funds to firms.

Currently, the JDB’s main objective is to extend loans for business-fixed investments. The JDB Law must be revised if the bank is to lend operational funds.

He said the ministry will examine ways to flexibly use the JDB, which has already expanded its lending to firms’ personnel and lease costs. But such loans, started in December, are extended only to cover corporate costs related to fixed investments.

The government may become more flexible in extending unsecured semi-governmental loans to small and medium-size companies suffering from credit problems, Prime Minister Keizo Obuchi indicated Thursday.

During the day’s Upper House Budget Committee session, Yoshitaka Konoike of the Liberal Democratic Party told the prime minister that more of loans should be made available from semi-governmental financial institutions to help small- and medium-size companies having difficulty in securing loans from commercial banks.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.