The government will grant zero- and low-interest loans to aid small business owners in Hokkaido who have been adversely affected by the eruption of Mount Usu, Ministry of International Trade and Industry chief Takashi Fukaya said Friday.

The decision was made in response to strong demands from local businesses, Fukaya said, adding that the measure will retroactively incorporate 640 million yen in disaster restoration loans already extended by governmental financial institutions since the end of March.

The interest-free loans will be available to small and medium-size enterprises based in and around the town of Abuta, which has been severely affected by the eruptions. The central and local governments will shoulder the cost of the lending.

Introduction of the plan will start when the Hokkaido Prefectural Assembly approves it during sessions that will convene later this month. Loans of up to 10 million yen per year will be extended.

Resort relocation help

SAPPORO (Kyodo) The government should enact special legislation to help businesses relocate from the Lake Toya hot-spring resort, from which residents were evacuated following the recent eruption of Mount Usu in southwestern Hokkaido, a researcher said Friday.

“It is necessary to transfer facilities to prevent residents from suffering again (from possible volcanic activity at Mount Usu) in the future,” said Koichi Miyairi, a public finance professor at Nagasaki University.

Miyairi, who has studied the measures the government took in the early 1990s in the aftermath of the eruption of Mount Unzen in Nagasaki Prefecture, recently wrapped up his research on the impact the Mount Usu eruption had on surrounding areas.

The 732-meter volcano erupted March 31 for the first time in nearly 23 years, spewing mud and smoke. No one was injured, due largely to early and extensive evacuation efforts that affected about 16,000 residents of southwestern Hokkaido.

Similar proposals were made when the volcano last erupted nearly 23 years ago, but the plan was abandoned as too costly.

Miyairi said local businesses are likely to be “plagued by debts.”

under the government’s current system for aiding those affected by natural disasters.

He said low-interest loans are currently the only support on offer to businesses.

“It is indispensable to enact special legislation to offer loans without interest in the first 10 years and to defer repayments on outstanding loans,” the professor said.

Miyairi also proposed setting up a fund to complement existing disaster-relief measures.

Most of those evacuated after the Mount Usu eruption have since been allowed to return home. However, about 3,300 people, mostly residents of the Lake Toya hot-spring district, continue to be affected by evacuation orders.

It is unclear when the area will be able to reopen for business.

Many of the resort’s residents and workers want the evacuation order affecting the once-lucrative tourist resort lifted immediately.

The hot-spring district usually attracts some 3.5 million visitors a year.