60% of Special COVID-19 Loans in Arrears at End of 2024; Government Directs Local Authorities to Boost Support

The Yomiuri Shimbun

15:33 JST, May 19, 2025

A total of ¥241.3 billion in special government loans meant to mitigate the financial impact of the COVID-19 outbreak was due to be repaid by the end of last year, but about 60%, or ¥146.6 billion, were in arrears at that time, the Health, Labor and Welfare Ministry has announced.

Under the COVID-19 special loan program, the government used more than ¥1 trillion in public funds to support households that were in a dire financial situation during the spread of COVID-19. By helping recipients rebuild their lives, the ministry aims to ensure they can make steady repayments.

Households whose incomes declined were able to borrow up to ¥2 million interest-free through prefectural social welfare councils. Approximately 1.6 million households are believed to have used the program, and the total amount of loans taken out from March 2020 to September 2022 amounted to ¥1.443 trillion.

Repayments began in January 2023. The monthly amount paid by each household ranges from several thousands to several tens of thousands of yen.

Of the total amount that came due by the end of 2024, ¥94.7 billion, or 39%, had been repaid as scheduled, while ¥146.6 billion, or 61%, was in arrears. This is twice as much as the ¥66 billion that was in arrears at the end of 2023.

The ministry has said it failed to sufficiently assess the repayment capacity of borrowers in its rush to provide support.

The ministry will ask prefectural social welfare councils to report every fiscal year on the status of home visits in which officials from municipal social welfare councils remind recipients of their obligation to repay the loans. They will also be asked to report on efforts to help loan recipients find work and improve their financial situation.

Households that do not have to pay resident tax are exempted from repaying the special loans. The ministry will continue to monitor support for such households and encourage the councils to boost their assistance. Loan repayments are expected to continue until about 2034.

“Many households are facing financial difficulties due to high prices, so safety nets should also be enhanced, such as housing assistance for low-income earners,” said Yohei Kadosaki, a professor of social welfare studies at Nihon Fukushi University.