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The number of companies that went bankrupt with debts of 10 million yen or more in fiscal 2005 fell for the fourth straight year to a 14-year low, thanks to a pickup in economic activity and government aid for struggling firms, a private credit research agency said Friday.

Tokyo Shoko Research said 13,170 companies went under in the last fiscal year, down 0.1 percent from the previous year and the smallest number since fiscal 1991, when 11,557 businesses folded.

The combined debt of the failed companies amounted to 6.12 trillion yen, down 15.7 percent. It is the the first time in 11 years combined debt has stayed below 7 trillion yen.

The 764 business failures that involved debts of 1 billion yen or more also represent the lowest number in a decade.

Of the bankruptcies, 61.5 percent were small companies with five or fewer employees.

There were also eight listed firms that collapsed, one more than in fiscal 2004.

But a shakeout in the service sector continues, with bankruptcies in financial services, insurance and other services recording double-digit increases.

In March, the final month of the fiscal year, corporate bankruptcies numbered 1,255, up 10 percent from a year earlier, rising for the sixth straight month and topping 1,200 for the first time in nine months.

Debts in March, however, came to 513.31 billion yen, down 17.4 percent and the lowest number in March for the past 10 years.

Bankruptcies attributed to poor sales amounted to 799, the highest for any month in fiscal 2005.

Businesses with five or fewer employees accounted for 65.4 percent of the March bankruptcies.

Corporate failures increased in seven out of 10 industries and seven out of 10 geographic areas.

The report notes that many smaller firms in regional cities continued to fold, while business was much better in the Tokyo area. This divergence in performance may become more pronounced in the months ahead as financial institutions are expected to cut back on lending to less creditworthy firms, according to the research agency.

Although the March bankruptcy figure spiked, the overall trend seems relatively flat, it said.

According to a similar report released the same day by Teikoku Databank, another research agency, there were 848 corporate failures in March, up 9.1 percent from a month earlier and the second consecutive monthly rise.

The monthly figure was the highest in fiscal 2005. The reported bankruptcies had total debts of 473.96 billion yen, up 45.7 percent.

The number of firms that went under reached the highest level of the fiscal year in the retailing industry at 153, and in the real estate sector at 55, Teikoku Databank said.