Professional Documents
Culture Documents
Contents
1 SME in Japan
2 Financial Services in Japan
3 Issues in SME Financing
4 Public SME Financing - Loans
5 Public SME Financing - Credit Supplementation
6 FILP System
7 Public and Private Sector Funds
1.SME in Japan
SME in Japan
Definition of SME and SE in SME Basic Act
SME
industry
capital
employees
(million yen)
Manufacturing up to 300
up to 300
Wholesale
up to 100
up to 100
Services
up to 50
up to 100
Retail
up to 50
up to 50
small enterprises
employees
up to 20
up to 5
up to 5
up to 5
source: METI
Source: BOJ
Source: BOJ
Banks
Numbers
140
Numbers of
borrowers
(million)
2.03
Total
Outstanding
loan (trillion
yen)
441
Average
outstanding
loan
(million yen)
84.62
3 major banks
regional banks
second reg.
banks
Shinkin banks
105
270
1.14
224.5
212.5
63.7
35.76
source: JFC
(\9.6Tr)
(\3.3Tr)
(\7.5Tr)
(\1.4Tr)
(\19.8Tr)
(\8.5Tr)
(\11.3Tr)
(\14.0Tr)
(\9.6Tr)
(\25.0Tr)
\29.4Trillion (FY2011)
Newly established
Japan Finance Corporation
JBIC (split on April 2012)
The Okinawa DFC
\0.9Trillion (FY2011)
Full privatization
Local Governments newly
Established Japan Finance
Organization for Municipalities
900
20.0
179
18.0
175
167
158
800
150
141
133
126
Public financial
institutions
16.0
123
124
122
121
122
700
14.0
600
12.0
500
10.0
Share of public
financial institutions
b
a
b/(a+b)
400
812
797
763
8.0
738
710
719
725
719
725
694
688
690
710
300
6.0
200
4.0
100
2.0
Private financial
institutions
0.0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
source: BOJ
15
(Finance Operations)
Operations to Facilitate Crisis Responses:
Operations to Facilitate Specific Businesses Promotion, etc.:
7,248.2
2,626.8
6,459.2
5,362.0
54.1
Loan
JFC MBIU
Banks
Shinkin banks
JFC(MBIU)
Numbers
140
270
Numbers of
borrowers
(million)
2.03
1.14
0.95
Total outstanding
loan (trillion yen)
441
63.7
7.2
Average
outstanding loan
(million yen)
84.62
35.76
6.66
Loan
JFC SMEU
Amount:
2,095.7
billion yen
Safety-net Loans
1,154.7 billion yen
55.1%
source: JFC
20
Lehman shock
Uneasiness of financial
10
BIS
-10
Setback of private sector in the
time of tight money
(Increase in the supply of funds from JFC)
Changed
definition of
-20
1979 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 2000 01 02 03 04 05 06 07 08 09 10 11 12 13
(FY/quarterly)
Borrowings
Capital contributions
Borrowings
Government-guaranteed Bonds *
FILP Agency Bonds
General Account
Special Account for Reconstruction
from the Great East Japan Earthquake
Capital contributions
* Government-guaranteed bonds with a redemption period of five years or more are included in FILP.
Financial Markets
FILP Bonds
2012
2013
2014
(budget)
MIB Unit
16.6
15.2
19.5
SME Unit
13.8
14.3
13.4
25
Subrogated payment
Recovery
Insurance money
JFC
SME Unit
Loan
Comprehensive
insurance contracts
Credit guarantees
CGCs
(52 Corporations)
Financial
institutions
6. FILP System
Mechanism of FILP
Fiscal Investment and Loan Program (FLIP) consists of three elements, namely, Fiscal Loans, Industrial
Investments, Government Guarantees.
FILP supports policy targets by financing FILP agencies. They provide long-term, fixed, and low-interest (loan
interest = government bonds interest) loans, which are difficult for the private sectors to supply.
Self fund-raising
(FILP Agency bonds)
FILP Plan
FILP Bonds
Financial
Markets
Fiscal Loans
(FILP
agencies)
Government
affiliated
FY2014 plan
16.2 trillion yen
Loans
financial institutions
(e.g.)
Japan Finance Corporation
Japan Bank for International
Corporation
Development Bank of Japan Inc.
Japan International Corporation
Agency, etc.
Other agencies
11.8 trillion yen
Governme
Government-guaranteed Bondsnt
guarantees
Government-owned
Dividends
Stocks
(e.g. NTT, JT)
Industrial
Investments Investments
(e.g.)
Japan Student Services
Organization
Welfare and Medical Service
Agency
Innovation Network
Corporation
of Japan
Japan Oil, Gas and Metals
National Corporation, etc.
Local Governments
Loans
Investment
s
People,
companies,
communities
Difference of Fund Flow between the Subsidies of General Account and FILP
Fund Flow of the Subsidies of General Account
Taxes
National
Government
(General
Account)
People
Public services
Subsidies
Public
entities
People
Issuance of FILP
bonds, dividends
Financial
markets
Interest payments/
redemption
FILP
Interest payments/
redemption, payment to
the national treasury
Public services
FILP
agencies
Fees/Charges
People
Unlike the General Accounts subsidies which lack tracking functions for awarded funds, FILP provides loans which accompanies the redemption process
of the transferred funds in the future. The redemption process includes a long-term checking function to the beneficiaries. This function facilitate the
beneficiaries to use funds in a disciplined manner.
As FILP plays the role of national lender (or investor), if the strong policy needs for a certain project with a certain degree of profitability is proposed,
FILPs financing scheme could be used.
FILP Bonds
Interest bearing
debt
Redemption
Fixed
interest
loan
Secure &
efficient
Fiscal Loan Fund
Act, Article 1
Project with strong
policy necessity,
and
reliable repayment
Collection
Industrial Investment
Governme
nt-owned
Stocks
(e.g. NTT,
JT)
Loan
with not
necessarily
Collection
fixed
interest
Dividends
Industrial Investments
Past investment
returns
Return
Loan
Risk Money
Project
- with strong policy
necessity
- with promising
Investment
return
Investment
- very risky
- not sufficient
funds by the
private
sector alone
Under the overall economic policy target of ending deflation and revitalizing the Japanese economy, FILP for FY2014 is planned to
provide capital instruments (ex. long-term risk money) as a catalyst, to the economy, so as to appropriately address the challenges that it
faces, such as (1) to activate private investments, (2) to support small and medium enterprises facilitating required efforts to improve their
performances, (3) to support expanding the activities of Japanese enterprises in overseas market, and (4) to export infrastructures and secure
natural resources
The total sum of the plan amounts to 16,180.0 billion yen (12.0, compared to the FY2013 initial plan), reflecting the improvement of
SMEs business conditions and the progress made so far in responding to the earthquake disaster
The amount of Industrial investment, which supplies long-term risk money, increases largely for two consecutive years to 317.2billion yen
(20.2, compared to the FY2013 initial plan)
Unitbillion yen
FY2013
(Initial Plan)
Supports to activate private investments
Japan Oil, Gas and Metals National Corporation
Institute which supports overseas transport and urban
development projects
Cool Japan Fund Inc.
PrivateFinance Initiative Promotion Corporation of Japan
Agriculture, forestry and fisheries Fund corporation for
Innovation, Value-chain and Expansion Japan
Innovation Network Corporation of Japan
Financial supports to enterprises
Japan Finance Corporation Small and Medium Enterprise
OperationsMicro Business and Individual Operations
FILP Plan
Industrial investment
(Reference)
FY2014
(Initial Plan)
450.8
115.8
570.1
84.4
109.5
50.0
240.0
30.0
321.2
35.0
15.0
10.0
8,362.9
10.0
7,198.0
4,070.5
3,830.5
1,632.0
1,032.0
1,260.0
650.0
831.0
650.0
384.4
482.0
1,408.0
860.5
420.5
3,316.9
2,386.0
491.0
4,851.0
3,681.0
1,170.0
13.5
1,421.6
859.6
398.6
31.9
2,907.3
1,940.0
556.1
4,083.0
3,453.0
630.0
18,389.6
263.8
16,180.0
317.2
Annual
Change(%)
26.5%
13.9%
(Note)Figures are based on the initial plans. Figures in [ ] from FY2008 to FY2013 are total amounts after revision with supplementary budgets and
follow-up funding by the flexible management clause.
(Reference)The FY2014 balance is prospected to 170.5 trillion yen (FY2013 balance is prospected to 172.4 trillion yen).
1.0%
12.3%
15.8%
12.0%
20.2%
FY2014 FILP bond issues will amount to 16.0trillion yen (FY2013 initial 11.0trilion yen), Fiscal Loan Fund security issues
will amount to 2.1trillion yen (FY2013 initial 4.6trillion yen).
Old FILP
New FILP
FILP agency bonds
(self procurement)
Postal
savings
Deposit
Pension
reserves
FILP
Goverment
bonds
interest
0.2
Loan
FILP
Agencies
Financial
markets
FILP
(Government)
bonds
Goverment
bonds
interest
0.2
Postal
savings
Scrutiny of
required
amount
Aggregate
procurement
Pension
reserves
FILP
Deposit
FILP
Agencies
Loan
interest
rate
=Goverment
bonds
interest
Cut off
Independent management
of all deposits
Elimination of the mandatory deposit of all postal savings and pension reserves, and introduction of market-based
Main Points of Reform
fund raising
Introduction of policy cost analysis and rigorous expansion of information disclosure
Obligation to deposit all postal savings and pension reserves was eliminated. Instead, these funds are to be managed independently in the financial markets.
Only the necessary amount of funds is to be raised from FILP bonds in light of thorough scrutiny of the redemption certainty and the complementary function
to the private sector.
Loan interest rates are based on market rates for Japanese government bonds according to maturities.
FILP agencies are to issue FILP agency bonds.
Policy cost analysis is to be introduced and enhanced.
Information disclosure is to be substantially expanded to ensure the discipline of special public corporations.
Business
Fund
government
government
Sub-Fund
Business
Name
Government
Guarantees
Private Sectors
286
14
1,800
15.7
13
10.1
1,000
30
1.8
35
10
10
300
100
30
8.5
35
100*
Total
loan for resources to provide risk money
619.7
44.4
3,135