Press Conference by Taro Aso, Deputy Prime Minister, Minister of Finance, and Minister for Financial Services

(Excerpt)

(Friday, March 29, 2013, from 8:24 am to 8:35 am)

[Questions and Answers]

Q.

The SME Financing Facilitation Act will soon be expiring, and I believe it has been pointed out at various times that the Act has had the side effect of distorting free competition.  I would like to ask if you have any remarks on the merits and demerits of the Facilitation Act thus far, including this point.

A.

Back when Shizuka Kamei was Minister for Financial Services, the Act was referred to as the Heisei-era version of the “Acts of Virtuous Government.” Simply put, it was like a note maturity extension.  Of course, there were some companies rescued by this. Indeed, this undoubtedly prevented some companies from going bankrupt. I cannot say with certainty what happened with any particular company among tens of thousands of companies, but naturally it is a good thing that some companies undertook proper management efforts in response and improved their financial standing among other things.  With regard to companies where such progress is not apparent, though, simply modifying maturity date repeatedly is meaningless. Consequently, we will at the very least not extend the Facilitation Act yet again but instead let it expire. Thereafter, I would like to see proper monitoring carried out to ensure that financial institutions providing loans to small and tiny companies do not drastically change their policies just because the Facilitation Act has expired. In this connection, we have been asking local financial bureaus, chambers of commerce and commerce and industry associations to ensure that the proper steps are taken in this regard, and to inform us of any institutions not complying.  Where to draw the line is a topic that constantly comes up, but we would like to deal with the matter in this way to make assurance doubly sure.

(End)

Site Map

top of page