Japan Press Weekly

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2013 May 15 - 21 [ECONOMY]

Mega bank loans to SMEs hits record low

The ratio of lending to smaller business owners in relation to the total amount that three mega bank groups have lent has reached a record low since their inauguration in 2005. This was revealed in their latest financial reports released on May 15.

According to the consolidated financial statements of Mitsubishi UFJ Financial Group, Mizuho Financial Group, and Sumitomo Mitsui Financial Group for the fiscal year beginning April 1, 2012 and ending March 31, 2013, the three groups’ ratios of loans to smaller businesses to total commercial and industrial loans averaged 60.4%, breaking the previous record low of 60.8% marked at the end of the fiscal year ending March 2009 just after the collapse of Lehman Brothers in 2008.

The ratio of the Mitsubishi UFJ group was 57.2%, the Mizuho group 56.3%, and the Sumitomo Mitsui group 69.5%.

It is highlighted that although the Bank of Japan has supplied a vast amount of money to banks in accordance with the government policy of “monetary easing of a different dimension,” such money has yet to reach small- and medium-sized enterprises (SMEs).

Loans to SMEs from the three groups combined total 103.3 trillion yen in the fiscal year ending March 2013, down approximately 900 billion yen from the previous year.

The financing of SMEs continues to decrease from its peak of 120 trillion yen seven years ago, recording the lowest level since the founding of the three megabanks.

In contrast, their overseas loans grow every year. Their balance of loans abroad in March 2013 became as high as 260% of that in September 2005.

Related past issue:
> Behind ‘Abenomics,’ financial support to SMEs terminated [May 14, 2013]