On behalf of everyone at Japan Finance Corporation (JFC),I would like to convey my heartfelt sympathies to all those who have suffered as a result of the Great East Japan Earthquake.

Measures Implemented in FY2010

In FY2010, ended March 31, 2011, the directors and employees of JFC worked in unison to fulfill JFC’s role of providing a safety net for small and medium-sized enterprises (SMEs) in accordance with government policies. In particular, as an emergency response to the financial crisis triggered by the collapse of Lehman Brothers Holdings Inc., we provided critical support to SMEs and agricultural, forestry, and fisheries enterprises struggling to meet their working capital requirements. As a result, in FY2010 JFC executed Safety-Net Loans totaling 4,300 billion yen.
　JFC also supported the financing needs of SMEs and micro businesses by underwriting and backing guarantees for the Emergency Guarantee Program carried out by Credit Guarantee Corporations (CGCs) throughout Japan.
　In addition, pursuant to the act concerning facilitate financing for SMEs, JFC demonstrated flexibility in providing support to SMEs, taking such actions as relaxing loan repayment conditions. Simultaneously, the Japan Bank for International Cooperation (JBIC) also responded to turmoil in the international financial system by providing support to Japanese companies engaged in business overseas.Also, as part of our crisis response efforts, JFC helped support Japanese companies by providing credit to the Development Bank of Japan and the Shoko Chukin Bank.
　Throughout FY2010 JFC responded swiftly and aggressively to such events as the outbreaks of foot and mouth disease and avian influenza, the volcanic eruption of Shinmoedake, and, most recently, the Great East Japan Earthquake. Our responses included providing expert consultation on funding issues to SMEs, micro businesses, and agricultural, forestry, and fisheries enterprises.
　With regard to the Great East Japan Earthquake, JFC is undertaking comprehensive efforts to support businesses that have suffered directly and indirectly from the disaster, including our establishing special consultation counters at all 152 branches throughout Japan and providing toll-free telephone consultations seven days a week.
In areas that sustained extensive damage, we have dispatched extra staff from our Head Office and other branches, and are working in concert with a range of institutions and agencies to arrange consultation meetings and briefings.
　Beginning with FY2010, JFC has focused sharply on such services as matching businesses and promoting collaboration among agriculture, commerce, and industry.
Multiple sections within JFC have worked closely together to provide these and a broad array of other services to our customers. These efforts led to the formation of 1,565 new pairs of businesses in FY2010—approximately three times the number formed in FY2009.
　Further, under the government’s New Growth Strategy and other policies, JFC worked to meet a variety of needs in the policy-based financing sphere. These efforts included providing support in such areas as business start-ups, social business initiatives, overseas business expansion, and integration among enterprises in primary, secondary, and tertiary industries.

Organizational Management Initiatives

In the area of organizational management, we unified our human resource and compensation systems under a merit- and performance-based structure; implemented organizational reforms, including measures aimed at clarifying authority and responsibilities; and built systems to facilitate swift decision-making. These changes allow us to respond smoothly to economic crises and efficiently undertake the type of operations that have increased substantially in the wake of the Great East Japan Earthquake.
We also worked to integrate back-office operations as part of our cost-reduction efforts.
　In human resource development, JFC worked to bolster management skills and specialized knowledge by establishing a human resources academy and launching a systematic human resource development program. We also implemented measures to help more women achieve management-level positions. As a reflection of our commitment to preparing women for management roles, we have set a target of having 5% or more of management positions filled by women within seven years (compared with 1.3% in April 2011).

Results for FY2010

In FY2010, JFC recorded an overall net loss of 886.5 billion yen. A decline in credit-related expenses helped lower the overall net loss by 226.3 billion yen compared with the previous fiscal year
　In credit insurance programs, income from insurance premiums and other premiums amounted to 282.2 billion yen, disbursements for insurance claims totaled 723.1 billion yen, and provision of reserve for insurance policy liabilities amounted to 371.1 billion yen. As a result, credit insurance programs recorded a net loss of 812.0 billion yen.
　In operations other than credit insurance programs, JBIC posted a net income of 59.0 billion yen, while domestic　operations recorded a net loss of 133.5 billion yen,　owing mainly to provision of allowance for loan losses of　162.4 billion yen, which includedt the impact of the Great East Japan Earthquake.

New JFC Programs and Measures

With regard to our response to the Great East Japan Earthquake, we have added new response measures to our Business Management Plan and will continue working to meet customer needs through consultation on repayment and lending. We will fully utilize two special loan programs, which were established in FY2011, ending March 31, 2012, in response to the post-earthquake situation.
JFC is devoting extensive efforts to support funding, recovery, and reconstruction efforts.
　JFC is also responding energetically to the government’s New Growth Strategy and other policies. Among other measures, we are providing financing and information to proactively support SMEs seeking to expand overseas, and in FY2011 we will open a new Representative Office in Shanghai, China. We will also offer backup support to exporters of agricultural, livestock, and marine products.
　As part of our ongoing efforts to generate synergies through business integration, we will continue providing a broad range of services that support collaboration between business units. In so doing, we will leverage our full capabilities to strengthen our financial services in terms　of providing both funds and information.
　Ever since our establishment, JFC has worked to　streamline operations and improve efficiency throughout　our organization. Focusing these same efforts on our IT　systems, we intend to build a new IT system under a　three-year plan commencing in FY2011. The core of the　new system will be a private cloud computing system　developed to replace our current host/mainframe system.
　Pursuant to recently enacted laws, JBIC will strengthen　its focus on overseas infrastructure investment. Consequently,　JBIC will be separated from JFC in April 2012.
Throughout FY2011, however, JBIC will continue to operate　under its current structure and provide the same　range of services it currently provides.

Listening to customers remains a foremost priority at JFC,　as we strive to contribute to the growth and development　of local economies, the Japanese economy as a whole,　and the international economy.
　As we undertake these endeavors, I sincerely ask for　your continued support and understanding.