Banks Caught between Ballooning Loan Biz, Infection Control

Economy

Tokyo, April 23 (Jiji Press)--Financial institutions in Japan are struggling to handle surging loan requests from small companies with cash flow problems amid the coronavirus outbreak, while also facing the need to keep down the number of staff members at offices for infection control.

More and more firms are in need of banks' support as calls for refraining from going out and business closure requests now cover across the country. Such a situation is likely to continue for a long time, with the timing of the outbreak coming under control still not in sight in the country.

Since the Japanese government announced in March its decision to lend operating funds effectively with no interest through affiliated financial institutions, requests for such loans have continued to increase and the pace of growth accelerated after the government declared a state of emergency over the virus epidemic on April 7.

At Japan Finance Corp., one of government lenders, the number of loan requests for securing operating funds came to 260,000 as of April 19, tripling from the end of March. As the lender increased staff members for handling loan requests, its decisions to offer loans also ballooned.

The staffing situation is close to reaching its limit, however, with even private financial institutions coming at the end of their rope in responding to floods of loan requests.

[Copyright The Jiji Press, Ltd.]

Jiji Press