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The government and the Bank of Japan will jointly promote the securitization of small and midsize companies’ credit receivable as a new funding tool to deal with the credit crunch, according to plans released Thursday at the Diet.

Takeo Hiranuma, minister of economy, trade and industry, and BOJ Gov. Masaru Hayami said they will foster a market in which financial institutions can buy and sell the credit they accept from smaller firms.

“We want to pave the way for accounts receivable to be sold and bought by securitizing them,” Hayami said. “We will strive together with the ministries concerned to realize and foster the market as early as possible.”

The measure, outlined by Hiranuma and Hayami before the House of Representatives Budget Committee, is designed to allow small and midsize firms to receive cash before settling their accounts with business partners.

The government is also considering providing public guarantees for the type of security through state financiers.

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