69.7 Bil. Yen in COVID-19 Loans to Small Businesses Uncollectible

Yomiuri Shimbun file photo
Japan Finance Corp.

TOKYO, Nov. 7 (Jiji Press) — A total of ¥69.7 billion in special loans extended by Japan Finance Corp. and Shoko Chukin Bank to small businesses hit hard by the COVID-19 pandemic are uncollectible, a report by the Board of Audit of Japan showed Tuesday.

Government-affiliated financial institutions provided a total of ¥21,874.8 billion in the special loans between January 2020 and March this year.

Of the total, the audit board investigated ¥19,436.5 billion in some 1.18 million cases of such financing by JFC and Shoko Chukin Bank.

The outstanding balance of such loans as of the end of March 2023 stood at ¥14,308.5 billion. Although ¥5,058.2 billion had been repaid, a significant amount is believed to have been refinanced into other loans, the audit board said.

Meanwhile, the investigation found that ¥69.7 billion in 7,291 pandemic-related loan cases is unlikely to be recovered due to bankruptcies and other reasons.

The amount of loans whose repayments were delayed by three months or more came to ¥119.5 billion, while the amount of those whose repayment conditions were eased, such as reductions in monthly repayments, totaled ¥665.4 billion. Both figures doubled from the end of March 2022.

There were 59 cases in which JFC provided some ¥589 million in pandemic-related loans despite the absence of earnings forecasts or other items in related documents.

The audit board urged JFC to take appropriate steps to ensure proper practices.

JFC and Shoko Chukin said that they will continue to strive for appropriate business operations.