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ShinGinko Tokyo is unfriendly to small businesses

ShinGinko Tokyo, a new bank which the Tokyo Metropolitan Government established in April to help small-and medium-sized businesses with loans, is even more reluctant to lend money to them than major banks.

Japanese Communist Party representative Daimon Mikishi in the House of Councilors Fiscal and Finance Committee meeting on June 28 pointed out that ShinGinko Tokyo requires borrowers to submit a statement of account signed by a licensed tax accountant for companies and an income tax return form for self-employed when they apply for loans without security or guarantor.

No major banks except for trust banks impose such strict conditions on loans.

Daimon asked, "Why did the Financial Service Agency (FSA) approve these procedures that are not practiced in major banks, knowing that small businesses cannot afford to employ licensed tax accountants?"

Takafumi Sato, FSA supervisory bureau director, simply said that granting loans depends on the operational judgment of the bank. Daimon urged the agency to correct the situation since the bank has acknowledged the need for improvement.

Although the bank's catch-phrase is easy loans for small businesses, the bank actually collects high interest rates of 9 to 15 percent. It is said that many applicants are rejected even at these interest rates. Small businesses are complaining that ShinGinko Tokyo is "useless." -Akahata June 29, 2005