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- Consolidation and Period of Grace for Repayment of Existing Debts under the Enhancement Loan System
Great East Japan Earthquake-related SME Measures No.12Consolidation and Period of Grace for Repayment of Existing Debts under the Enhancement Loan System
Tokyo, Hokkaido and other prefectures (hereinafter collectively referred to as “prefectures”) have provided loans for projects by cooperatives or the like to enhance facilities such as industrial complexes and joint shopping malls (hereinafter referred to as “Enhancement Loans”) in cooperation with the Organization for Small and Medium Enterprises and Regional Innovation, Japan (SMRJ), which is under the jurisdiction of the Small and Medium Enterprise Agency (SMEA).
After the Great East Japan Earthquake in March, certain entrepreneurs have been having difficulty in continuing their businesses as many facilities and assets developed using Enhancement Loans were damaged. Therefore, SMEA today requested prefectures and SMRJ to rapidly and smoothly waive or otherwise consolidate the existing debts of Enhancement Loans. At the same time, SMEA requested them to rapidly provide a period of grace for repayment or extend the repayment deadline for the entrepreneurs which are suffering from serious damage because of the recent earthquake.
In response to the above requests, SMRJ will closely investigate the effect of the recent earthquake on existing debts, arrange debt consolidation plans with the prefectures concerned and decide the policy of measures around the end of April.
1. Quick Consolidation of Existing Debts
Prefectures and SMRJ have cooperated in providing long-term and low-interest Enhancement Loans to support enhancement of facilities (such as industrial complexes and joint shopping malls) by business cooperatives etc.
However, if it becomes difficult for small and medium enterprises to continue their businesses because their facilities or assets enhanced with Enhancement Loans were damaged by the Tohoku-Pacific Ocean Earthquake, it is essential to rapidly and smoothly waive or otherwise consolidate existing debts for the stabilization of their management and recovery of the regional economy.
For this purpose, SMEA today requested SMRJ to investigate the effect of the recent earthquake on existing debts of Enhancement Loans and to immediately arrange with prefectures the cases which may require debt consolidation including waiver.
Further, SMEA requested prefectures to arrange with SMRJ the cases which may require debt consolidation and then bring up such cases at their assembly in accordance with the provision under the Local Autonomy Act or otherwise consolidate the debts of Enhancement Loans rapidly.
On the basis of these requests, SMRJ will take the following measures:
1) SMRJ will dispatch its staff to the enterprises with loans (for all enterprises (about 100 enterprises) in the communities to which the Disaster Relief Act is applicable, in particular) and investigate the damage situation and possibility of continued business in the future; and
2) On the basis of the results of the above investigation, SMRJ will study the policy and measures taken in the future for each enterprise with loans and after consultation with the prefectures concerned, decide the policy and measures for debt consolidation in the future around the end of April.
2. Period of Grace for Repayment and Extended Repayment Deadline for Existing Loans
SMEA today requested prefectures and SMRJ to rapidly provide a period of grace for repayment or to extend the repayment deadline for entrepreneurs suffering from serious impact directly or indirectly by the recent earthquake in addition to the measures in 1. above.
On the basis of the above request, SMRJ will unconditionally set a repayment grace period or extend the repayment deadline up to three years particularly for entrepreneurs suffering from serious direct impact from the recent earthquake. In addition, SMRJ will arrange with the prefectures concerned so as to set a repayment grace period up to one year for economically affected entrepreneurs outside of the disaster area (Refer to Exhibit (PDF:15KB)
).
Release Date
April 5, 2011
Division in Charge
Business Support Division, Business Support Department, Small and Medium Enterprise Agency