Japan Press Weekly

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2011 February 2 - 8 [ECONOMY]

Gov’t downsizes support for SMEs

The Ministry of Economy, Trade, and Industry on January 28 announced that from April, the government will reduce the types of industries eligible for financial assistance to small- and medium-sized enterprises (SMEs) with fund-raising difficulties.

In October 2008, the government introduced the program with the aim to bail out ailing SMEs that are plagued by declines in sales due to the increase in price of crude oil or raw materials. Under the program, government-funded credit guarantee corporations give 100% endorsement to SMEs in industries designated by the government when they apply for loans provided by private financial institutions.

Initially, the program had covered about 20 industries. In February 2010, as a measure to respond to the financial crisis, the government increased the number of industries covered by the program to 82, almost all industries.

However, the government plans to decrease the number of industries to 48 in April, then to the original 20 in October.

Japanese Communist Party Secretariat Head Ichida Tadayoshi, in his interpellation at the January 28 plenary session of the House of Councilors, said, “The system is working as a safety net. The Lower House Economy, Trade, and Industry Committee in December 2010 unanimously adopted a resolution calling on the government to maintain and improve the system. The government should maintain the current system.”