A total of ¥69.7 billion ($462.7 million) in special loans extended by Japan Finance Corp. and Shoko Chukin Bank to small businesses hit hard by the COVID-19 pandemic are uncollectable, a report by the Board of Audit of Japan shows.
Government-affiliated financial institutions provided a total of ¥21.87 trillion in the special loans between January 2020 and March this year.
Loans that effectively won't be collected since the companies involved are currently filing for bankruptcy and other reasons, totaled ¥124.6 billion, while high-risk loans — in which lenders set aside the loaned amount after payment wasn't made for three months or more — added up to ¥878.5 billion. In total, over ¥1 trillion worth of loans were at risk of not being repaid, according to the report released Tuesday. A senior official at the audit board said that the situation could cause taxpayers to shoulder the burden depending on the amount of losses.