A growing number of small and midsize companies affected by the coronavirus pandemic are utilizing "fintech," or the integration of finance and technology, as part of their fund procurement efforts.
This is because fintech allows such companies to obtain loans within several days, as their borrowing programs are screened swiftly based on account activities recorded using software, experts say.
The presence of fintech-based financing services is increasing at a time when numerous cash-strapped business operators are seeking consultations with public and private financial institutions.
Tokyo-based online lender Money Forward Fine Inc. is enjoying a rise in contracts for loans that utilize accounting data. The company's number of such loan programs, which offer financing in as little as three days, that were implemented in February surged 30 percent from December last year, reflecting growing demand from regional firms.
"We borrowed ¥1 million as funds for use through June" from Money Forward Fine, a restaurant manager in Sapporo said. "After having struggled to procure funds, we were saved by the loan program."
Japan Net Bank lends money to firms based on data obtained through its free accounting software.
Among major banks, MUFG Bank lends up to ¥10 million within two days by analyzing corporate account activity data using artificial intelligence.
The government has hammered out a ¥1.6-trillion loan program mainly through Japan Finance Corp. amid the virus crisis. But the program takes a certain period of time to be implemented.
While fintech-based loan programs can be executed within several days, their lending interest rates are relatively high.
Akira Ieda, chairman of Money Forward Fine, said that he believes companies will use fintech-based loans to obtain stop-gap funds before they receive loans from government-directed credit programs.
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