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To help smaller firms counter the tight lending practices of banks, trade chief Kaoru Yosano said Tuesday his ministry is working to boost the amount of funds available for government-affiliated financial institutions and credit insurers from 25 trillion yen to 40 trillion yen.

Last Friday, Yosano and other Cabinet members were instructed by Prime Minister Keizo Obuchi to sketch a concrete outline to support ailing small and medium-size companies by the end of the week.

Yosano said the scale of the funds would be based on the amount of risky loans held by banks, estimated at 80 trillion yen as of March 31 by the Financial Supervisory Agency, adding that the smaller firms have been major borrowers.

So far, the government has given priority to extension of funds mainly to its financial institutions, but Yosano and Ministry of International Trade and Industry officials explained that more funds are needed to strengthen the government-run credit insurance system in order for smaller firms to borrow money from private financial circles.

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