Japan sets aside 2.2 trillion yen to support businesses and low-income groups

The Japanese government has set aside 2.2 trillion yen (US$20.19 billion) to help low-income groups with children and support businesses that are shortening operation hours in compliance with COVID-19 led restrictions. 

Finance Minister Taro Aso also announced on Tuesday that the government will adopt measures to help medium and larger-sized companies boost capital funds, with the end goal of helping restaurants and lodging businesses tide through the pandemic as they abide by restrictions due to the pandemic. 

So far, the government’s COVID-19 support has so far mainly been targeted at smaller firms, through measures such as providing no-collateral and no-interest loans.

However, government officials acknowledged that the prolonged pandemic has raised the need to provide capital for medium and large firms to support their financing, besides also responding to demand for short-term financing. 

“By steadily carrying out these measures, we’ll make sure to support restaurant and lodging businesses that hire many non-regular workers” like contract and part-time workers, Aso addressed the media after a cabinet meeting, according to Reuters. 

READ: Japan plans to increase minimum hourly wages to 1,000 yen

Under the new loan programme, government-backed lenders like the Development Bank of Japan and Shoko Chukin Bank can provide subordinated loans with interest rates around 1% for an initial three years, as well as preferred shares to firms in the restaurant and lodging sectors, among others. This is in comparison with subordinated loans with interest rates about 5% or more under normal circumstances.