The Cabinet approved the Cabinet Ordinance to extend the applicable period of the special exception concerning disaster-related credit guarantees under the Small and Medium-sized Enterprise Credit Insurance Act by changing the expiration date from September 11, 2011, to March 31, 2012. The extended measure is one of those implemented to assist small and medium enterprises (SMEs) affected by the Great East Japan Earthquake pursuant to the Act on Special Financial Support to deal with a Designated Disaster of Extreme Severity.

The Great East Japan Earthquake was designated as a disaster of extreme severity on March 13, 2011, under the Act on Special Financial Support to deal with a Designated Disaster of Extreme Severity. At the same time, the following three measures were implemented in response to this disaster (applicable to SMEs in any part of Japan). The Cabinet approved a Cabinet Ordinance (revision of the original Cabinet Ordinance) to extend the first measure among them, which was due to expire on September 11, 2011, until March 31, 2012, in consideration of the recovery and reconstruction state of devastated SMEs.

1. Special exception concerning disaster-related credit guarantees under the Small and Medium-sized Enterprise Credit Insurance Act

   Credit guarantee corporations shall provide credit guarantees with special limits, aside from general guarantees and the Great East Japan Earthquake recovery emergency guarantees, for SMEs that have received a Disaster Victim Certificate for offices or main assets from the head of the local government. (100% guarantees. Guarantee limits: up to ¥80 million in unsecured loans and up to ¥200 million for general loans).

2. Extension of repayment period of capital investment loans for small-scale enterprises

   The repayment period for existing loans under the Small-Scale Enterprise Equipment Implementation Funds Loan Program and the Small-Scale Enterprise Equipment Loan Program shall be extended by up to two years (from a maximum of seven years to a maximum of nine years).

3. Subsidies for post-disaster reconstruction projects at facilities of cooperative associations

   The government shall support subsidies provided by prefectural governments to post-disaster reconstruction projects conducted by cooperative associations, etc. (When a prefectural government subsidizes three-quarters of project costs, the national government shall subsidize two-thirds of the costs borne by the prefectural government.)

The Cabinet Ordinance will be promulgated on Friday, September 9.

September 6, 2011

Office for Business Stability, Small and Medium Enterprise Agency