¥468.5 Bil. Loaned to Households Due to COVID-19 is Now Uncollectable; Number May Increase with Further Defaults

The Yomiuri Shimbun

1:00 JST, October 24, 2024

Of the over ¥1.4 trillion loaned to households in financial distress due to COVID-19 through the government’s special loan program, ¥468.5 billion has been exempted from repayment and is now uncollectable, according to the Board of Audit of Japan.

Many people have already defaulted on their loans, creating concerns that the uncollectable amount could increase. The board on Tuesday called the Health, Labor and Welfare Ministry to provide appropriate support for loan recipients.

Under the program, interest-free loans of up to ¥2 million were provided to households whose income decreased for reasons such as temporary work stoppage during the COVID-19 pandemic. ¥1.443 trillion was disbursed from March 2020 to September 2022.

In a notice from the head of the ministry’s Social Welfare and War Victims’ Relief Bureau in November 2021, the government announced that households exempt from resident tax would also be exempted from repaying these loans.

An investigation by the board determined that the amount of loan money which had been exempted from repayment had reached ¥468.5 billion by the end of March of this year.

According to the ministry, repayment had begun for ¥661.3 billion loans as of the same point in time, although ¥118.8 billion of that had been defaulted on or was unpaid for other reasons as of the end of August. The remaining ¥313.3 billion, excluding the exempted amount, has yet to enter its repayment period.