The government has deferred a decision on whether to include specific measures to fully privatize Shoko Chukin Bank, a public financier specializing in loans to smaller businesses, in a bill on streamlining government-linked financial institutions.
The government plans to submit the bill on the public lenders' shakeup to the Diet March 10, government sources said Thursday.
A subject of heated debate in the course of drafting the bill was whether to include the abolition of government funding and remove the legal basis that assures state involvement in the bank.
Internal Affairs and Communications Minister Heizo Takenaka, a staunch advocate of Prime Minister Junichiro Koizumi's structural reforms, has called for scrapping the legal basis and including in the bill the complete sale of government-held shares in Shoko Chukin.
The Ministry of Economy, Trade and Industry, which overseas the bank, has resisted Takenaka's suggestions, saying the legal framework is essential to ensure government support for small businesses in emergencies.
METI chief Toshihiro Nikai aired concerns at a news conference earlier in the week, saying that in the event of full privatization, Shoko Chukin "could focus on extending loans to big businesses or could be absorbed by (investment) funds with large capital and stop lending money to smaller companies."
Therefore, Nikai said, "The legal framework to ensure that smaller businesses can borrow money from the bank and to fend off certain acquiring parties is necessary."