Japan Unveils New Crisis Measure for Small Firms

Japan Bank for International Cooperation will provide $3 billion to domestic banks to enable them to lend to small- and medium-sized firms operating overseas.

Japan announced on Feb. 26 that it will provide loans to firms operating overseas to help them cope with a global credit crunch. The Japan Bank for International Cooperation said it would offer $3 billion to domestic banks to enable them to lend to small- and medium-sized firms operating overseas, particularly in Asia.

"We've decided to enhance our financing support for the overseas operations of Japanese companies," Finance Minister Kaoru Yosano said.

It is the latest in a series of measures taken by Prime Minister Taro Aso's government to support companies struggling to secure access to credit in the wake of the worst financial crisis in decades.

In December, the government launched a low-interest rate loan program for crisis-hit Japanese firms. It recently raised the funding capacity from two trillion yen to 10 trillion yen due to a growing number of applicants.

Japan announced last week that its economy suffered its sharpest contraction on record in the three months to March, shrinking 4% compared with the previous quarter, but hopes are growing that the worst is over.

Copyright Agence France-Presse, 2009

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