- Information
- News Releases
- Back Issues
- April 2011
- Improving the Operation of the Mutual Relief System to Prevent the Chain Reaction Bankruptcies of Small and Medium Enterprises
Great East Japan Earthquake-related SME Measures No.13Improving the Operation of the Mutual Relief System to Prevent the Chain Reaction Bankruptcies of Small and Medium Enterprises
– Partial Amendment of the Ordinance for Enforcement of the Act on Mutual Relief System for the Prevention of Bankruptcies of Small and Medium Enterprises -
Under the Mutual Relief System for the Prevention of Bankruptcies of Small and Medium Enterprises (SMEs), individual SMEs can take out unsecured, interest free loans that don't require guarantors or any surety for amounts of not more than ten times the total premiums deposited in case of customer bankruptcy, so that such SMEs can avoid chain reaction bankruptcy.
We have revised the system so that enterprises can use the mutual aid loan also in the case where they have bills, checks or the like of the customers who are disabled, to make repayments under the impact of a severe disaster.
1. Background
In the current mutual relief system for prevention of bankruptcies of SMEs a SME can apply for a mutual aid loan when its customer 1) has an application filed for statutory bankruptcy proceedings (under the Bankruptcy Act, Civil Rehabilitation Act, etc.); 2) receives a disposition to suspend bill transactions; or 3) has bankruptcy proceedings outside legal framework (limited to the cases with intervention of attorneys).
In the event of a serious disaster such as the recent earthquake, however, the clearing house treats bills, checks etc., that were unable to be paid due to the disaster as “nonpayment due to a disaster” and implements a measure to set a grace period before the application of the nonpayment disposition (listing the nonpayment report and disposition to suspend transactions). This results in the situation that the mutual relief system members cannot collect the accounts receivable, and at the same time cannot apply for mutual aid loans.
2. Contents of the Measure
By additionally providing “nonpayment due to a disaster” as a reason for requiring a mutual aid loan under this mutual relief system (amendment by Ordinance of the Ministry), the mutual relief system members who have bills, checks etc. “unpaid due to a disaster” can apply for a mutual aid loan. This amendment will support financing of the system members who cannot collect the accounts receivable.
Reference
Release Date
April 8, 2011
Division in Charge
Office for Business Stability, Business Environment Department, Small and Medium Enterprise Agency