Large Increase in Lending of Banks and Credits Increased Lending with New Corona

Compared to the same period last year, it was more than 2.57 trillion yen, an increase of 4.8%, the highest increase rate since January 2001, when the comparison was possible. Lending with virtually no interest or unsecured financing as an economic measure of the government, mainly due to an increase in loans to companies and sole proprietors whose sales have sharply decreased due to the spread of new coronavirus infection.

This is the form in which the system that started from last month began in private financial institutions and led to the active lending of banks and credit unions. With regard to financing support for SMEs, the Bank of Japan has established a new system to supply financial institutions from this month. There is concern that the spread of the new coronavirus infection will continue for a long time, and lending is expected to increase further.

This reflects the rising financial demand of companies whose sales have dropped due to the spread of the new coronavirus. By type of business, the growth rate of the Tokyo Metropolitan Bank was the highest at 6.6%, and according to the BOJ, in addition to the rising demand for funds from large corporations, “partly from the perspective of supporting the cash flow of subcontracted SMEs, There is also the aspect that large companies are raising a large amount of money”. Regional and second regional banks also increased their growth rate from the previous month's 2.9% increase, up 3.8%. The balance of deposits increased by 6.2% year-on-year to 772,053.5 billion yen, which was the highest ever for both the growth rate and balance.

The number of corporations, individuals, and public money deposits is increasing, and due to the growing uncertainty about the future, companies are taking steps to secure more cash on hand, while curbing consumption due to the refraining from going out by individuals and government measures.

Source: https://shorturl.at/hos36