Eight years after Great East Japan Earthquake, many disaster victims are struggling to repay relief loans


Many residents in the hardest-hit prefectures of Iwate, Miyagi and Fukushima are struggling to repay emergency relief loans that they received in the wake of the March 2011 earthquake and tsunami, a Jiji Press survey of related municipalities showed.

In the three prefectures, a total of ¥49.6 billion in public funds was disbursed, based on damage that resulted from the disaster and covering about 28,000 cases, under a program to allow low-income families to borrow up to ¥3.5 million each.

In some 4,000 cases the first repayment deadlines had passed by March 2018, but in 1,703 cases, the deadlines were missed.

Miyagi accounted for as many as 1,598 of the 1,703 cases, with overdue balances totaling about ¥140 million as of March 2018.

As of December, loan delinquencies had soared to ¥650 million in 4,784 cases in Sendai alone, according to the city government.

Many families struggling to repay relief loans include elderly people and college students, while authorities are unable to reach some borrowers, according to the department in charge of the relief loan program.

“A borrower of loans from taxpayers shouldn’t say this, but my family is on a very tight budget,” said a 76-year-old woman in Sendai. She said her family borrowed ¥1.7 million under the public loan program because related subsidies and charity grants were not enough to repair their house, which was officially recognized as being severely damaged.

Her husband then became unable to work due to illness, and the family failed to meet its first repayment deadline last October, she said.

Yoshihiro Sato, a lawyer who belongs to a bar association in Sendai, called on borrowers who are having difficulties repaying relief loans to first seek advice from local authorities and others about possible debt moratoriums and cuts in repayments.

“No action could lead borrowers to incur delinquency charges, while also increasing debt collection burdens on authorities,” Sato said.

A Sendai official said that the central government should take measures, including extending repayment deadlines, to support disaster victims struggling to rebuild their incomes. An official of a different municipal government suggested there is a need to provide low-income earners with grant-type assistance, instead of loans.

Following the 1995 Great Hanshin Earthquake, 13 municipalities in Hyogo Prefecture provided a total of ¥130.9 billion in relief loans to people under a similar program. A total of ¥5.3 billion remained outstanding as of September 2018.

In 2015, the central government adopted a policy to allow municipalities to decide whether to exempt borrowers from repaying remaining loans if their repayment capacities are projected to remain low.

Kobe opted to stop collecting loans and had forgiven ¥6.5 billion in outstanding loans by June 2017.

Total debt collection costs at the Kobe Municipal Government had reached ¥4.3 billion by fiscal 2014.