The government said Friday it will ensure that 40 trillion yen will be available for state financial institutions and credit insurers to help small businesses that are suffering from tight lending by banks.
Specifically, 20 trillion yen will be made available to credit guarantee associations and the Small Business Credit Insurance Corporation in order to expand the government-run credit insurance system, according to an outline of measures for small businesses to take to counter the tight lending. The steps were approved at Friday's Cabinet meeting.
Another 20 trillion yen, including about 13 trillion yen the government has ensured for the current fiscal year, will be on hand for financial institutions, according to the outline.
To back owners of small businesses who have suffered from the tight lending by banks, the government will launch an extraordinary insurance system Oct. 1 that will loosen requirements for companies to gain insurance and will lower the rate of insurance fees.
The government, by submitting to the current Diet session a bill to revise the Small Business Credit Insurance Law, will also lift ceilings on unsecured insurance and special small insurance, from 35 million yen to 50 million yen and from 7.5 million yen to 10 million yen, respectively. "While negotiating with the financial authorities, we had difficulty in convincing them of the need to fully subsidize the credit insurers," trade chief Kaoru Yosano told reporters following the Cabinet meeting.