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The Health and Welfare Ministry will introduce a flexible repayment policy for the 132.5 billion yen in government loans issued to victims of the Great Hanshin Earthquake, it was announced Thursday.

It is the first time the government has formed such a policy, which will also apply to emergency funds scheduled to be granted to evacuees who fled Mount Usu in southwestern Hokkaido.

Most borrowers are elderly people, and the maximum repayment average of 63,000 yen per month is too heavy a burden for many borrowers, ministry officials said.

The maximum loan of 3.5 million yen is tendered through municipal governments and given to individuals who suffer severe economic damage from natural disasters, they said.

The national government provides two-thirds of such funds while prefectural governments chip in the rest. The loans must be repaid within 10 years at 3 percent interest, with payments every six months or once a year.

In the Great Hanshin quake, which struck in 1995, 58,000 households received a total of 132.5 billion yen, with 130 billion yen of that lent to residents of Hyogo Prefecture.

Repayments, which were suspended for five years, are scheduled to begin this fall.

Under the plan, borrowers facing difficulty repaying the loans can have their installments reduced and individual cases can be reviewed each year.

Although the new policy is not designed to waive the loans, they must be repaid within 10 years, the officials said.

“But this does not mean that repayments cannot be delayed, depending on borrowers’ financial circumstances,” a ministry official said.