A Franco-Belgian bank operating in Japan is offering longer term loans to municipalities that are trying to get rid of heavy debts that are threatening to bankrupt many of them.
Paris-based Dexia Credit Local, under the umbrella of Dexia S.A. headquartered in Brussels, started business at its Tokyo branch last December and has since extended about 150 billion yen in loans to 37 municipalities and prefectures. It is filling a demand created by the growing threat of bankruptcy — Yubari in Hokkaido has already filed — and the central government's moves to decentralize.
The European bank has been helping municipal governments that have to raise more funds by themselves due to cuts in subsidies and grants from the central government.