A survey conducted by the Finance Services Agency (FSA) has shown that around 50% of small and medium enterprises (SME) have transactions with government-affiliated financial institutions. Many of these companies responded that this is because “they charge lower interest rates than local banks and offer better loan terms.” It appears that this reflects the current situation where the size of public financing has not contracted, despite the economy’s recovery to “normalcy.”
The survey was administered on 30,000 SMEs that use regional banks as their main banks, obtaining responses from about 30% of them. The FSA reported its finding that 48% of the respondents had transactions with government-affiliated banks at an unofficial meeting in May.
Government-affiliated financial institutions are supposed to “supplement” commercial banks’ business operations in principle. However, a major regional bank in northern Kanto said that “there is no way for us to compete with the government banks offering a fixed interest rate of 0.1% over 10 years.” (Abridged)